FMI’s Nonresidential Construction Index dropped from 55.1 to 51.7 in the third quarter.

Nearly every component was slightly lower than the previous quarter. The measure of construction industry vitality remained in expansion territory, despite the decline, though. A score above 50 indicates expansion; below 50 indicates contraction.

Survey participants’ expectations for their own construction businesses remained the strongest component at 62.1, down from 70.7 in the previous quarter.

The quarterly FMI survey recorded a decline in the project backlog category from 69.8 to 66.1, still a healthy indicator that keeps expected workloads solid into early 2027, FMI says.

Materials cost readings fell to 14.5, staying far below 50, consistent with further cost escalation. Labor cost readings held near 20, and productivity slipped just below the neutral line to 48.4.