Turner Building Cost Index Forecast Construction Cost to Increase Slightly in Second Quarter
Increased construction material costs are counter-balanced by level of market activity and easing of commodity pricing pressure
June 15, 2011 – (RealEstateRama) — Turner Construction Company announced that the Second Quarter 2011 Turner Building Cost Index has slightly increased over the First 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 811 reflects a 0.62% increase from the First Quarter 2011 and 1.63% increase from the Second Quarter 2010.
Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index said, “The market dynamic of restrained demand and increasing material cost have been the major influencers on construction costs over the past three quarters and continues through the second quarter of 2011. Although commodity prices have appeared to ease since the end of the first quarter, the second quarter Index reflects the ongoing impact on increasing construction material costs. The level of construction activity is a factor limiting the influence of labor cost increases on the overall cost of construction.”
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.
