Turner Construction Company, the nation’s leading general builder, today announced that construction costs increased 1.48 percent over the Fourth Quarter 2007 and 4.96 percent over the First Quarter 2007. Turner has issued this quarterly forecast for more than 80 years.
According to Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index, “The non-residential construction market remains active in spite of the residential market slowdown and the uncertainty in the credit markets. The perception that there may be an economic slowdown has lead to an easing of pricing pressure and an increase in competition among trade contractors in some markets. However, in major metropolitan markets such as New York City, the available volume of work continues to drive pricing upward.”
“In general, the industry is still facing a shortage of skilled labor and uncertainty of the availability and cost of materials. Therefore, the pressure on construction costs in the non-residential markets will continue to result in cost increases over the next several quarters.”
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 high quality pre-construction phase services and utilizing alternative procurement strategies, Turner continues to effectively serve its clients and manage the market risks associated with cost escalation issues.
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—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.