FMI Corp.

Q4 2013 Nonresidential Construction Index Drops 2.9 Points but Salvages Improvement

The 2013 Fourth Quarter Nonresidential Construction Index (NRCI), by construction consultant and investment banker FMI, dropped 2.9 points in the fourth quarter to 57.4. But that score is 1.9 points ahead of fourth quarter 2012. An NRCI of more than 50 indicates growth; therefore, the fourth-quarter score still indicates modest improvement in the industry.

One of the reasons cited for the slight decline is political infighting and uncertainty. Proceeding with caution by investors seems to be the new norm.

FMI's Q4 2013 Nonresidential Construction Index Report

Productivity continues to slide. The 48.6 score is at its lowest since the second quarter of 2008. Ultimately, attention to productivity and profit margins will be key to sustaining growth.

Building construction continues to improve since 2012. However, growth is still unsteady as the numbers have slipped 7.5 points to 64.1 this quarter. Material and labor cost also continues to rise causing the overall NRCI to fall.