Turner Construction Company announced that the second quarter 2009 Turner Building Cost Index, which measures nonresidential building construction costs in the U.S., has decreased 3.35% from the first quarter 2009 and is 8.92% lower than its peak in the second quarter of 2008. The Turner Building Cost Index number for second quarter 2009 is 837.
“An overall reduction in construction starts and increased competition has caused construction costs in the commercial and institutional markets to decline," said Karl F. Almstead, the Turner VP responsible for the Turner Building Cost Index. "Positive signs in the economy, including an upturn in the Architecture Billing Index and an anticipated increase in federal public sector spending, are signs of optimism in the construction industry. Commodity and material prices continue to drift downward in reaction to decreasing demand. Inventories and plant utilization rates have also declined."
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.
Turner is the leading general builder in the U.S., ranking first or second in the major segments of the building construction field. During 2008 Turner completed $10.7 billion of construction. Turner is the only builder offering clients a nationwide network of offices across the U.S. Founded in 1902, the firm is a subsidiary of HOCHTIEF. For more information, visit Turner's website at www.turnerconstruction.com.