PHOENIX, AZ—Construction costs are up 7.42 percent over the past 12 months, according to international property and construction consultancy firm Rider Levett Bucknall (RLB).
The Quarterly Cost Report for North America features construction cost information for 14 US and Canadian markets.
“The average increase in construction costs from 2020 through 2021 was 7.42%. It can be argued that some of the increase in 2021 may simply be catching up on the low rate of increase in 2020, but it is more likely a reaction to the combination of the labor shortages and supply chain issues that the industry has encountered,” said Julian Anderson, FRICS, President of Rider Levett Bucknall North America. “In my opinion, while 2022 should be less frenetic than 2020 and 2021, it is unlikely that we will see any relief from the current high rate of cost increases until some of the heat goes out of the economy.”
• RLB reports that from July 1, 2021 to October 1, 2021, the U.S. national average increase in construction costs was approximately 1.50% (7.42% annualized)
• Boston (2.66%), Chicago (2.28%), New York (1.92%), San Francisco (1.99%), and Seattle (5.00%) are the markets with cost increases above the national average during the fourth quarter
• Markets seeing an increase in construction costs below the national average during the fourth quarter include Denver (1.34%}, Honolulu (0.94%), Las Vegas (1.35%), Los Angeles (1.39%), Phoenix (1.21%), Portland (1.33%), and Washington DC (0.37%).
Key fiscal barometers
• The U.S. Consumer Price Index (CPI) shows a year-over-year increase of 5.38%
• The U.S. Gross Domestic Product (GDP) increased at an annual rate of 2.1% in Q3, following a rate of 6.7% in the second quarter
• In October, the Architectural Billings Index (ABI) dipped to 54.3 from the previous month’s 56.6.