Construction Costs Rising in 2017

Could a rise in costs impact the construction jobsite? A recent report states that non-residential construction costs are going up in 2017.

The Construction Cost Index for the twin cities of Minneapolis and St. Paul, Minnesota, and five other major metropolitan areas in the U.S has been released. The markets tracked are experiencing steady construction activity and employment with indications of continuing strong growth in certain areas. According to the report, building owners should anticipate non-residential construction costs in the six markets to increase 3-4.5 percent in 2017. Overall construction costs increased 2.7-6.1 percent across these same markets last year.

While the rate of growth in construction employment has plateau in several markets, the non-residential construction labor market is considered healthy, according to employment data from the Bureau of Labor Statistics.Here are some highlights from five cities:

  • The Chicago cost index increased 4.3 percent throughout 2017. Chicago experienced one of the strongest quarterly growth rates over the last several years. Construction employment ended the year flat.Project owners should anticipate cost increases of 4 percent in 2017.
  • The Denver cost index increased 6.1 percent last year. Construction employment remained flat.
  • The Milwaukee construction cost index finished 2016 with accelerated growth. Milwaukee's construction labor market has grown 2 percent in the latest quarter. Project owners should plan on cost increases of 4 percent in 2017.
  • The Minneapolis-St. Paul construction cost index increased 2.7 percent. Construction employment growth has been mixed. Minneapolis-St. Paul construction growth appears to have accelerated at the end of the year.
  • The Phoenix construction cost index increased 4.5 percent. Construction employment growth in the latest quarter was up 8 percent after fluctuating throughout the past few years. Project owners should plan on cost increases of 3-4 percent in 2017. Seattle cost index rose 4.3 percent.
  • Seattle continues with healthy employment growth. Project owners should plan on cost increases of 4-4.5 percent in 2017.

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