by Rebecca Walker — September 2, 2009—Construction management and consulting firm FMI reported recently that its third-quarter Nonresidential Construction Index is essentially unchanged from second quarter’s 45, leading FMI to conclude that although the bottom of the recession is at hand, recession-like conditions aren’t likely to end soon for beleaguered nonresidential contractors.
“Most see the short-term outlook as slightly less bad than last quarter, and we will take that as a good sign, even if a small one,” FMI said, according to a report by the CoStar Group, a commercial real estate information company.
The construction labor market recovery “is not yet smooth and obvious,” agreed Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. He said the impacts of the $787 billion stimulus package passed in February should become significantly clearer during the next six to 12 months, helping stabilize nonresidential construction employment.
The nonresidential sector’s 13 percent increase in the value of new construction starts received much of its lift in July from the institutional structures such as healthcare facilities, which soared 172 percent, reflecting the July groundbreaking of seven massive hospital and medical center projects, according to McGraw-Hill.
Commercial building construction, as a component of the larger nonresidential market, turned in a mixed performance in July, however.
Retail, warehouse and hotel construction rose modestly from a weak performance in June, while construction of offices and manufacturing plants continued to drop in July from the previous month.
For more information, see the FMI Web site.
