In its latest quarterly survey of U.S. construction costs, international property and construction cost-consultant firm Rider Levett Bucknall (RLB) reports that construction spending in the United States is on track to increase approximately 6% in 2016. Overall, the national average increase in construction costs for the quarter was approximately 1.5%.
Julian Anderson, President of RLB North America, said, “In our new report, we see continued positive news for the health of the construction industry, a slight uptick in the rate cost escalation, and a sharp decrease in the rate of construction unemployment. Looking ahead, barring a Democratic sweep of the Presidency and Congress, we do not see any big, near-term changes in either private- sector or public-sector construction activity.”
While current spending is falling short of the 20% growth seen by select segments of the industry in 2015, the outlook for the construction field as a whole is reasonably favorable. Continued low interest rates, rising consumer confidence, and healthy job growth also contribute to the guarded optimism.
Going forward, RLB sees a 5% expansion in construction spending for 2017. Based on a recent consensus forecast by the Urban Land Institute, the firm notes that past gains in activity may start to slow, suggesting the latter stages of a real estate cycle. National economic growth has been slower than previously anticipated, in part due to increasing national and international vulnerabilities. Combined with weakened domestic manufacturing output and investor uncertainty pending the results of the U.S. presidential election, these conditions may begin to create downward pressure on the construction industry in 2017.
About the Rider Levett Bucknall Quarterly Construction Cost Report
Rider Levett Bucknall reports on the comparative costs of construction in 12 U.S. cities on a quarterly basis, indexing them to show how costs are changing in each city, as well as against the costs of the other 11 locations. Together with additional international and national cost compendia, the cost research equips clients with complete and relevant information to assist in business decisions.
Related Stories
Industry Research | Jan 31, 2024
ASID identifies 11 design trends coming in 2024
The Trends Outlook Report by the American Society of Interior Designers (ASID) is the first of a three-part outlook series on interior design. This design trends report demonstrates the importance of connection and authenticity.
Apartments | Jan 26, 2024
New apartment supply: Top 5 metros delivering in 2024
Nationally, the total new apartment supply amounts to around 1.4 million units—well exceeding the apartment development historical average of 980,000 units.
Self-Storage Facilities | Jan 25, 2024
One-quarter of self-storage renters are Millennials
Interest in self-storage has increased in over 75% of the top metros according to the latest StorageCafe survey of self-storage preferences. Today, Millennials make up 25% of all self-storage renters.
Industry Research | Jan 23, 2024
Leading economists forecast 4% growth in construction spending for nonresidential buildings in 2024
Spending on nonresidential buildings will see a modest 4% increase in 2024, after increasing by more than 20% last year according to The American Institute of Architects’ latest Consensus Construction Forecast. The pace will slow to just over 1% growth in 2025, a marked difference from the strong performance in 2023.
Construction Costs | Jan 22, 2024
Construction material prices continue to normalize despite ongoing challenges
Gordian’s most recent Quarterly Construction Cost Insights Report for Q4 2023 describes an industry still attempting to recover from the impact of COVID. This was complicated by inflation, weather, and geopolitical factors that resulted in widespread pricing adjustments throughout the construction materials industries.
Hotel Facilities | Jan 22, 2024
U.S. hotel construction is booming, with a record-high 5,964 projects in the pipeline
The hotel construction pipeline hit record project counts at Q4, with the addition of 260 projects and 21,287 rooms over last quarter, according to Lodging Econometrics.
Multifamily Housing | Jan 15, 2024
Multifamily rent growth rate unchanged at 0.3%
The National Multifamily Report by Yardi Matrix highlights the highs and lows of the multifamily market in 2023. Despite strong demand, rent growth remained unchanged at 0.3 percent.
Self-Storage Facilities | Jan 5, 2024
The state of self-storage in early 2024
As the housing market cools down, storage facilities suffer from lower occupancy and falling rates, according to the December 2023 Yardi Matrix National Self Storage Report.
Designers | Dec 25, 2023
Redefining the workplace is a central theme in Gensler’s latest Design Report
The firm identifies eight mega trends that mostly stress human connections.
Contractors | Dec 12, 2023
The average U.S. contractor has 8.5 months worth of construction work in the pipeline, as of November 2023
Associated Builders and Contractors reported today that its Construction Backlog Indicator inched up to 8.5 months in November from 8.4 months in October, according to an ABC member survey conducted Nov. 20 to Dec. 4. The reading is down 0.7 months from November 2022.