Firm provides reasons for nonresidential construction optimism

Management consulting and investment banking firm FMI released its Nonresidential Construction Index (NRCI) for the fourth quarter. The index increased slightly from the third quarter, moving from 62.5 to 62.8. According to FMI, the 62.8 mark is 5.5 points ahead of the index from a year ago. FMI says an NRCI above 50 indicates improvement or expansion.

FMI says there are a few reasons for optimism related to nonresidential construction. The firm says businesses are starting to build again, backlogs are expanding, and future business looks good with low inflation. In addition, FMI says businesses have a sense of financial security with improved balance sheets.

Still, FMI adds that the costs of labor and materials continue to rise. These factors have held the NRCI score down. In addition, a shortage of skilled laborers remains a concern.