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.  
Designing for Performance: Key Considerations for Efficient, Durable Masonry Projects
August 2026

A successful masonry project starts well before the first stone is set. The craftsmanship on site matters, of course, but many of the decisions that shape the final result are made much earlier—during design, detailing, and material selection. Those choic

Jeff Tew
MAP Partner
Manufactured Stone MAP Partner Stone (Exterior) Stone (Interior)
Read More
Change Orders: Standard Operating Procedure
August 2026

In masonry construction, change orders are not occasional events; they are guaranteed. Drawings do not always match field conditions, specifications can conflict, and real-world construction has a way of exposing gaps in design. At DRP Masonry, we operat

Donnie Williams
Resources
Read More
RFIs: Clarity, Communication and... Hierarchy?
August 2026

In construction, any project starts with drawings. Plans. Schedules. Specifications. Whether we're talking about new construction, additions, or restoration, there is a plan, there is design intent, and a way every piece of a project needs to fit together

Kate Vienna
Technical Talks
Read More
Zero Laydown: Navigating the Logistics of Tight Urban Job Sites
August 2026

In modern commercial construction, spatial real estate has become just as valuable as the materials themselves. The industry shift toward high-density, urban projects means that the sprawling job sites of the past have been replaced by tight footprints wh

Shayne Sanders
MAP Partner
Read More