2011 Strong market competition and flat labor costs reduce overall increase in construction costs
New York, N.Y. – March 28, 2011 – (RealEstateRama) — Turner Construction Company announced that the First Quarter 2011 Turner Building Cost Index has slightly increased over the Fourth Quarter of 2011. The Turner Building Cost Index measures costs in the non-residential building construction market in the United States. The Turner Building Cost Index of 806 reflects a 0.62% increase from the Fourth Quarter 2010 and 0.88% increase from the First Quarter 2010.
Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index said, “The First Quarter forecast reflects price increases in select commodities, materials and equipment. A portion of these increases continue to be absorbed within the supply chain as the level of market demand continues to create an extremely competitive market environment. This is balancing the upward pricing pressure created by the increasing commodity and material costs. Labor costs have remained flat and are not contributing to the escalation in costs.”
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.