Dive Brief:
- Mortenson Construction has released its quarterly Construction Cost Index report for six U.S. metropolitan areas and forecasts a 3% to 4% increase in nonresidential construction costs this year.
- In addition, Mortenson reported that construction employment has leveled off in several of their tracked markets, but nonresidential construction activity is healthy. The company said building component trends for 30 categories are flat to moderately up for the fourth quarter of 2015.
- Mortenson, one of the largest construction companies in the U.S., tracks and reports on six metro areas in the U.S. including Chicago, Denver, Minneapolis, Milwaukee, Phoenix and Seattle. The company calculates its quarterly index by pricing representative, nonresidential construction projects.
Dive Insight:
"There continues to be a lot of activity in the markets we track, although average project size is reduced relative to recent years," Mortenson Vice President of Estimating Clark Taylor said in a release. "Construction employment is leveling out, and price escalation should be more consistent with long-term averages. We believe this should allow customers to more accurately plan for increases in the next year."
Mortenson added that most markets are experiencing healthy activity and employment. The company's report coincides with recent reports of improving conditions for construction companies in 2016. As of December, construction material prices in the Producer Price Index had fallen for six-consecutive months.
Mortenson's report of construction employment leveling off mirrors the Bureau of Labor Statistics employment report released today, which found construction companies added 18,000 jobs in January after a major surge of 45,000 positions in December.
