December 11, 2012
Labor and material costs are inching up in the Fourth Quarter following a pattern in place since the end of 2010
Turner Construction Company announced that the Fourth Quarter 2012 Turner Building Cost Index – which measures costs in the non-residential building construction market in the United States – has increased to a value of 839. This reflects a 0.84% increase from the Third Quarter 2012 and 2.57% yearly increase from the Fourth Quarter 2011.
Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index, said, “Construction activity has been restrained awaiting the outcome of the U.S. election and negotiation to resolve the Fiscal Cliff. In the near term, Super Storm Sandy will have a regional impact on the residential and commercial construction markets as people and companies struggle to recover and rebuild. In the long term, the storm may have an impact if building owners and urban planners begin to make preventive changes in their public and private infrastructure.”
Approximately 90% of Turner’s business is performed under contract arrangements where Turner provides extensive preconstruction planning services before the contract price is fixed and before construction starts. By providing preconstruction services and utilizing enhanced procurement strategies, Turner effectively manages the market risks associated with cost-related issues.
Turner has prepared the construction cost forecast for more than 80 years. Used widely by the construction industry and Federal and State governments, the building costs and price trends tracked by the Turner Building Cost Index may or may not reflect regional conditions in any given quarter. The Cost Index is determined by several factors considered on a nationwide basis, including labor rates and productivity, material prices and the competitive condition of the marketplace. This index does not necessarily conform to other published indices because others do not generally take all of these factors into account.