Competition in Construction Industry Restrains Price Increases
WASHINGTON, D.C. – December 8, 2011 – (RealEstateRama) — Turner Construction Company announced that the Fourth Quarter 2011 Turner Building Cost Index increased marginally over the Third 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 818 reflects a 0.49% increase from the Third Quarter 2011 and 2.12% yearly increase from the Fourth Quarter 2010.
Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index, said, “Commodity and material prices, although stable, are putting slight upward pressure on construction prices. He continued, “There are some indications of material price increases in the first part of 2012. However, price increases predicted by producers have not materialized.”
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.