Construction Costs Appear to be Stabilizing Following Decline Over the Past Six Quarters
New York, N.Y., August 30, 2010 – Turner Construction Company announced that the Third Quarter 2010 Turner Building Cost Index remains unchanged from the second quarter of 2010. The Turner Building Cost Index measures costs in the non-residential building construction market in the United States. The Turner Building Cost Index value is 798 for the Third Quarter of 2010. This reflects a 2.68% decrease from the Third Quarter 2009 and an overall decline of 13.16% over the past two years.
Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index said, “The economic environment has constrained demand in the construction market. This has created a competitive environment that has maintained the downward pressure on construction costs.” Almstead goes on to say, “Although certain commodity prices have been on an upward trend, the restrained market has made it difficult for manufacturers and suppliers to increase their prices.”
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.