Construction Costs Decrease for First Time in 10 Years
Date Posted: July 30, 2020
Posted In: COVID-19 Updates, News,
From ConstructionDive: A variety of pandemic-related forces have caused construction costs to decline slightly for the first time in a decade, which could lead contractors to feel a pinch in profits.
The Turner Building Cost Index, which measures costs in the U.S. nonresidential building construction market, fell to a value of 1177 in the second quarter of 2020, a 1.01% quarterly reduction from the first quarter. This is the first time the index from Turner Construction Co. has reduced in value since 2010.
“Trade contractor competition has increased in many areas as they work to secure backlog due to uncertainty they have about future opportunities,” said Attilio Rivetti, the Turner vice president responsible for compiling the Cost Index in a press statement.
Dive Insight:
Associated Builders and Contractors’ Chief Economist Anirban Basu echoed Rivetti’s sentiments about competition, saying that as a result of the COVID-19 pandemic, “the average construction firm leader is more concerned about demand for their services than any other consideration, including skilled worker shortages.”