Nonresidential construction price increases have thankfully cooled since the worst days of the COVID-19 pandemic, but 2024 may be tracking to finish with a bit of a bump.
That’s the takeaway from the latest edition of the Turner Building Cost Index, a data set with an 80-year history, which rose 3.6% in the third quarter of 2024 compared to a year ago, according to a Dec. 5 news release from the New York City-based contractor.
“Projects across various geographic regions are experiencing cost increases at higher rates than others due to localized robust construction activity in these markets as well as driven by numerous mega projects underway,” Attilio Rivetti, the vice president at Turner Construction who is responsible for compiling the index, said in a news release.
Rivetti stressed that overall, construction material prices remained stable during the second and third quarters. But some items have outpaced others due to specific circumstances. For example, “mechanical and electrical equipment continue to experience longer lead times as well as continued cost increases due to high demand,” said Rivetti.
Turner Building Cost Index through Q3 2024
The index finished the third quarter with a marginal sequential increase of 0.77% compared to the second quarter, and was 3.64% higher for the year.
The magnitude of that rise stands in contrast to the latest numbers from the U.S. Bureau of Labor Statistics. In October, for example, nonconstruction input prices rose 0.3% on a monthly basis, but were still 0.5% lower than a year ago. Through the end of the third quarter in September, those prices were 2.1% lower.
Turner, the largest contractor in the country, has maintained the index for more than 80 years by culling information from its projects nationally, including labor rates, productivity, material prices and how competitive local conditions are. It may not necessarily conform to other published indices, the firm says, due to its broader inclusion of factors.
