Turner Building Cost Index forecasts construction cost to increase slightly in Q2
| June 16, 2011
Turner Construction Co.‘s second quarter 2011 Turner Building Cost Index has slightly increased over the first quarter of 2011.
The Turner Building Cost Index measures costs in the non-residential building construction market in the United States. The Turner Building Cost Index of 811 reflects a 0.62-percent increase from the first quarter 2011 and 1.63-percent increase from the second quarter 2010.
“The market dynamic of restrained demand and increasing material cost have been the major influencers on construction costs over the past three quarters and continues through the second quarter of 2011,” said Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index. “Although commodity prices have appeared to ease since the end of the first quarter, the second quarter Index reflects the ongoing impact on increasing construction material costs. The level of construction activity is a factor limiting the influence of labor cost increases on the overall cost of construction.”
Nearly 90 percent of Turner’s business is performed under contract arrangements, where Turner provides extensive preconstruction planning services before the contract price is fixed and before construction starts. By providing preconstruction services and utilizing enhanced procurement strategies, Turner effectively manages the market risks associated with cost-related issues.