Rising Commodity and Materials Prices Drive Turner Building Cost Index to Slightly Increase for Fourth Quarter 2010
Strong market competition reduces overall increase in construction costs
New York, N.Y. – November 29, 2010 – (RealEstateRama) — Turner Construction Company announced that the Fourth Quarter 2010 Turner Building Cost Index has slightly increased over the Third 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 of 801 reflects a 0.38% increase over the Third Quarter 2010. However, overall construction costs have decreased by 0.25% when measured in comparison to the Fourth Quarter of 2009.
Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index said, “The Fourth Quarter forecast reflects increasing commodity and materials prices being offset by extremely competitive market conditions. This is resulting in construction costs remaining substantially unchanged from the previous quarter.”
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.