Nonresidential Construction Index Continues to Rise

FMI, a provider of management consulting and investment banking to the engineering and construction industry, released The 2013 First Quarter Nonresidential Construction Index report. The NRCI of 58.1 is a 2.6-point improvement over Q4 2012.
 

The improvement reflect fundamental bright spots in the economy. “Optimistic but not bullish” is the way one panelist described his outlook on hiring for his company in 2013. Reflective of this is that 45 percent of NRCI panelists expect to increase full-time direct employees by as much as 5 percent.

Most noting that hiring will be based on current staff reaching a level of consistently over full work capacity. Only 9 percent report that they expect to decrease the number of full-time direct employees.

In addition, NRCI panelists are slightly more optimistic than last year at this time for growth in nonresidential construction. Nearly 50 percent expect modest growth for 2013, with 18.4 percent predicting that industry growth for the year could reach as high as five percent. However, backlogs for NRCI panelists are unchanged, holding steady at a median of 9 months.

To download a copy of the full report, click here. For reprint permission or to schedule an interview with the author, contact Sarah Vizard Avallone at 919.785.9221 or savallone@fminet.com.

Nonresidential Construction Index Continues to Rise

FMI, a provider of management consulting and investment banking to the engineering and construction industry, has released its Second Quarter Nonresidential Construction Index (NRCI) for 2012. Rising 1.7 points from the first quarter, this is the highest confidence rating ever achieved, since the index was developed in 2007.
 
Panelists reveal that backlogs remain about the same at a median of eight months. However, all markets, with the exception of education construction, are expected to improve slightly over the next quarter. Productivity has also shown improvement. Holding down the NRCI is the continued increase in labor and material costs.

With U.S. elections and global economics dominating the headlines this year, FMI asked panelists to identify what issues may affect their business strategies. Topping the list of global issues are rising inflation as the result of U.S. monetary policy and the collapse of the European Union. Although debt default in Greece and Spain are important, they ranked considerably lower on the list of concerns. 
Topping the list of election-year issues are the need to reduce spending on entitlement programs and to reduce the national debt. Since NRCI panelists are all senior executives, FMI asked them what they might do if elected president of the United States. The most mentioned action items include:

• Tax reform
• Balanced budget
• Cost cutting
• Entitlement reform
• Collaboration rather than confrontation

To download a copy of the full report, click here.