April 10, 2017
According to Turner's quarterly Building Cost Index, skilled labor availability is an issue for the construction industry
Turner Construction Company announced that the First Quarter 2017 Turner Building Cost Index—which measures costs in the non-residential building construction market in the United States—has increased to a value of 1,019. This represents a 1.29% quarterly increase from the Fourth Quarter 2016 and a 5.05% yearly increase from the First Quarter 2016.
As the market appears to continue its upward trend, the availability of skilled labor continues to influence the decision making of subcontractors, who are maintaining a selective approach to pursuits so as not to become overburdened. Additionally, while material delivery lead times have been relatively consistent throughout the last few quarters and indicators for extended lead times have not been apparent, a continued high level of construction activity has potential to extend lead times in the future.
“We are seeing highest cost increases in the Southeast, South, and Northwest, with more modest increases in the Northeast and West,” said Attilio Rivetti, the Turner Vice President who prepares the Cost Index. “We have also seen moderate gains among raw material prices, particularly metals such as steel and iron. It will be important to maintain our focus on fluctuations in raw material costs, as they have the potential to be a driving factor in future escalation.”
Turner has prepared the construction cost forecast for more than 80 years. The building costs and price trends tracked by the Turner Building Cost Index may or may not reflect regional conditions. 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.
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