The Turner Corp., Dallas, recently announced that construction costs in the fourth quarter of 2005 are projected to increase over the third quarter of 2005.
According to the Turner Building Cost Index, the fourth quarter 2005 index will rise to 746, showing a 2.75% increase over the third quarter 2005 index of 725 and a 9.71% increase over the fourth quarter 2004 index of 674.
"Material prices continue to drive cost escalation,” said Karl F. Almstead, vice president responsible for the cost index. “Steel, cement (concrete), copper gypsum, wallboard and petroleum-based products are all experiencing cost increases and shortages in some areas due to domestic demand for finished products and global demand for raw materials. The competition for labor is intensifying in active markets creating additional pricing pressure.”
Almstead continued, "Although the impact of the rebuilding following the Gulf hurricanes has not yet settled through the construction industry, the influence of energy prices is being felt in the industry."
Turner has made its quarterly forecast for more than 50 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-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.