June 29, 2009
U.S. sees dip in construction costs
For the latest quarter ending April 2009, the overall Construction Cost Index (CCI) for the U.S. slipped into decline, according to new numbers from RSMeans, a leading supplier of construction cost information.
The CCI dropped 2.0% quarter to quarter (January to April 2009), which translates to a 7.9% drop on an annualized basis.
“The total index decline was all due to materials, as installation rates remained high,” said Reed Construction Data chief economist Alex Carrick. See Latest Construction Cost Changes for 51 Major U.S. Cities as Calculated by RSMeans.
To come up with its Construction Cost Index, RSMeans employs a composite model of nine building types: factory, office building, retail store, town hall, high school, hospital, parking garage, apartment building and hotel/motel.
Material prices to April 2009 were down 1.6% year over year, but slipped 4.9% quarter to quarter (January to April). The greatest sub-component changes came in metal joists and decking (-18.9% quarter to quarter); concrete reinforcing (-17.6%) and plaster and gypsum board (-7.2%).
Despite layoffs in the construction industry, however, installation or labour costs continued to rise “at a good pace,” Carrick said, increasing 5.7% year over year and 1.8% quarter to quarter.
“While construction starts in non-residential building and engineering construction are falling into rapid decline, at least until the publicly-funded stimulus wave is felt more clearly, there remains a solid carryover of work at the job site,” Carrick noted.
Much of this work is more highly skilled, particularly in the civil/heavy engineering category, and therefore higher paying, he added.
The fall in construction costs overall is “highly unusual,” Carrick said, but there are indications this may be short-lived.
According to the RSMeans Construction Cost Index for U.S. cities, the most significant drops quarter-to-quarter annualized were in Memphis (-11.4%), Charlotte (-11.1%) and Salt Lake City (-11%). Cities that fared the best in the same period were Tampa (0%), Seattle (-2.5%) and Kansas City (-3.0%).
The national average was -7.9%
|MOST POPULAR STORIES|
|TODAY’S TOP CONSTRUCTION PROJECTS|
These projects have been selected from 527 projects with a total value of $1,552,331,732 that Reed Construction Data Building Reports reported on Friday.
$120,000,000 Oakville ON Tenders
$48,225,000 Etobicoke ON Prebid
$40,000,000 Ottawa ON Negotiated
- CCA96th: Unlocking Canada's Potential
- VIDEO: LiUNA Local 183 Training Centre introduces new programs
- Wins delivered on infrastructure front: Rizzardo
- Behind the Velodrome’s Veil
- Ontario’s prompt payment bill needs work but supported
- Southwest L-evation
- Post-bid clarifications make feds liable for bid repair
- Panama Construction Fact for Today
- Ritchie Bros. hold first Canadian auction of 2014
- Skilled labour needs changing in Saskatchewan
- Quebec’s construction momentum ebbs after 15 years of expansion
- VIDEO: Canadian Construction Association conference Panama preview
- Concerns raised about P3 approach for Saskatchewan schools
- Journal of Commerce Preview for the week of March 10th, 2014
- Wood Design Awards
- Lone bidder prepares P3 proposal for Alberta schools
- Outgoing chair reflects on time at the helm of the CCA
- School board asks for traditional procurement
- Site Services in Vancouver
- Looking to improve contract awards
- Environmental verdict riles Taseko
- Prentice to mediate First Nations agreements
- CAWIC funded to create action plan to attract women
- More video surveillance used on construction sites
- Modular workforce housing meets Alberta Building Code standard
- Manitoba outlines infrastructure plan
- BC Hydro posts RFQ for Site C project