Turner Building Cost Index: Strong Level of Construction Activity Across the United States Continues to Drive Increase in Construction Costs

January 24, 2018

According to Turner Construction Company’s quarterly Building Cost Index, the busy construction market, shortages of skilled labor and the impact of natural disasters on material production and demand are putting upward pressure on construction costs

Turner Construction Company announced that the Fourth 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 1058. This represents a 1.34% quarterly increase from the Third Quarter 2017 and a 5.17% yearly increase from the Fourth Quarter 2016.
 
“We saw slight cost increases for select raw materials throughout the fourth quarter,” said Attilio Rivetti, the Turner Vice President responsible for compiling the Cost Index. “For example, despite steady glass prices, increases in aluminum pricing have translated to increased costs in curtainwall.”

Rivetti continued, “We are seeing pricing for oil and PVC-related products increase, as production capabilities were impacted by hurricanes in the Southern United States,” he said. “And, we are seeing a significant increase in demand for drywall in areas affected by the storms. These conditions are contributing to increased pricing and elongating lead times for select material.”

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 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.

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