Q3 Non-Residential Construction Index Report Released

Words: Dan KamysThe construction industry continues to proceed on the recovery track, although it is showing signs of a minor deceleration, according to the 2015 Q3 Non-Residential Construction Index (NRCI) Report, released by FMI Corporation, the leading provider of investment banking and management consulting services for the construction industry. FMI’s NRCI for Q3 2015 dropped 1.3 points to 63.6 from the previous reading of 64.9 in Q2. The index paints a mixed picture of the current state of the nonresidential construction sector. On one hand, the NRCI component for the overall economy dropped 6.3 points to 70.6 points this quarter. While down from its peak, this component still indicates that panelists contributing to the index remain bullish about the economy.  Similarly, indicators for the economies where panelists do the most business stood at 73.3, indicating a strong outlook despite a slight 3.4 points slip from last quarter. “The construction industry continues to proceed on the recovery track, although it is showing signs of a minor deceleration,” said Chris Daum, president and senior managing director of investment banking at FMI. “Despite the decrease in projected backlog and the squeeze from rising material costs, executives in our industry are still bullish and hold positive outlooks overall.” Highlights from the NRCI point to diverse forces driving the industry as we enter the last quarter of the year:
  • Panelists’ Construction Business.  Panelists’ views on their businesses are solidly positive with little changed from the last quarter.
  • Nonresidential Building Construction Market. Although the nonresidential building construction market where panelists do business slipped 1.4 points to 75.0, this NRCI component remains in the optimistic range.
  • Expected Change in Backlog.  The measure of expected change in backlog dropped 3.1 points this quarter to reach 68.8, while current backlog remains at a solid 10 months.
  • Cost of Construction Materials and Labor.  The cost of labor continues to rise, though not greatly changed from the last quarter, at 12.5. Materials costs continue to be high, but slightly lower than last quarter. Both labor and material costs act to hold down the overall NRCI as costs increase.
  • Productivity Low.  The productivity component stands at 47.6, the lowest since 2008. Executives surveyed report difficulties in maintaining productivity while squeezed by rising material and labor costs.
International Debt Impacts The NRCI Q3report tallies executives’ opinions on the potential impact of the Greek debt crisis on their businesses. A third of respondents indicated no immediate or long-term impact was likely for their businesses, 25% were unsure and only 2% surveyed expected they would have to adjust their strategic plans to deal with the uncertain economy. Business Changes Since Recession All sectors within the construction industry continue their recovery since the financial crisis, with companies making numerous adjustments to their businesses in the intervening recession. The NRCI Q3 report summarizes how business adapted during the recession. Among the strategies employed, greater selectivity regarding projects and clients tops the list, followed closely by greater use of technology for their businesses to drive productivity, stronger risk management, heightened productivity, and incorporating global geopolitical and economic conditions in decision making. Download the full NRCI Q2 2015 report here.  
Color Trends Shaping Today’s Masonry Projects
July 2026

Homeowners today are coming into projects with a lot more opinions than they used to have. Between social media, home shows and contractor sites, most customers already have a look in mind before you even quote the job. For masonry contractors, having a

Chad Riley
Stone Savvy
MAP Partner
Read More
The New Equation for Masonry Profit: Predictable Hardware and Proven Data
July 2026

The masonry industry is built on tradition, but modern growth requires a shift from guesswork to absolute certainty. When we talk about the philosophy that you cannot improve what you do not measure, we are looking at the literal minutes and manpower lost

Erin Koets Shayne Sanders
Build Smart
MAP Partner
Read More
Owen Heimbach
July 2026

This month, the MCAA had the pleasure of speaking with SkillsUSA First Place Winner Owen Heimbach, a young mason just starting out whose enthusiasm for bricklaying is truly contagious. His passion for the craft was evident throughout our interview.

Justin Stengel
GEN NXT
Read More
Backfill Your Foundation
July 2026

I’ve been noticing an uptick in a very specific kind of application lately, and once you see the pattern, you can’t unsee it. The résumé usually reads like a family photo album. “Started helping my dad when I was 15.” “Worked summers, then full time.” “R

Corey Adams
Building More
Read More