Turner Building Cost Index Shows 4.3% Annual Increase
WASHINGTON, D.C. – October 2, 2013 – (RealEstateRama) — Turner Construction Company announced that the Third Quarter 2013 Turner Building Cost Index – which measures costs in the non-residential building construction market in the United States – has increased to a value of 868. This reflects a 1.05% increase from the Second Quarter 2013 and 4.33% annual increase from the Third Quarter 2012.
“The design and construction industry has been recovering over the past several quarters and pent up demand is resulting in increased activity in design firms,” said Karl F. Almstead, the Turner vice president in charge of the Cost Index. He added, “Material prices are increasing, but generally off their highs of the year and labor costs remain constrained. The increase in construction activity has enabled pricing to cautiously increase among specialty and trade contractors as their order backlog grows.”
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.