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Turner Construction Company

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High Level of Construction Activity Drives Increase in Construction Costs

High Level of Construction Activity Drives Increase in Construction Costs

Turner Construction Company announced that the Third 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 1044.

This represents a 1.26% quarterly increase from the Second Quarter 2017 and a 4.92% yearly increase from the Third Quarter 2016. 

“The continued, robust level of construction activity and the fact that many regions have not just one but several mega projects underway are two factors having an impact on the ongoing shortage of labor,” explained Attilio Rivetti, the Turner Vice President responsible for compiling the Cost Index. “Turner’s increasing utilization lean construction practices, technology tools and modular construction methods helps the company manage the effects of these factors, optimizing work flows and maximizing efficiency on our projects.”

Rivetti continued, “Additionally this quarter, raw material prices experienced a slight increase, with aluminum experiencing a higher increase, and material delivery lead times have grown due to the demand for certain materials. Additionally, the devastation from Hurricane Harvey in the South has begun to affect fuel costs. Over the next few months we will be keeping our eye on Ethylene products in particular, which have the potential to affect construction material costs next quarter.”

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.