Earlier this week, The Turner Corporation announced that construction costs in the first quarter of 2006 are projected to increase over the fourth quarter of 2005. According to the Turner Building Cost Index, the first quarter 2006 index will rise to 766, showing a 2.68% increase over the fourth quarter 2005 index of 746 and a 10.85% increase over the first quarter 2005 index of 691.
Karl F. Almstead, the Turner vice president responsible for the Cost Index, says, “The volume of construction activity, cost pressure on materials associated with global demand, and the availability of skilled labor are the primary elements driving the cost escalation in the domestic construction market. Concerns over energy costs remain in the background, along with questions of the impact and timing of rebuilding following Hurricane Katrina.”
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: labor rates and productivity, material prices, and the competitive condition of the marketplace. The index does not necessarily conform to other published indices because others do not generally take all of these factors into account.