PHOENIX, AZ—Rider Levett Bucknall (RLB), an international property and construction consultancy, has released its latest quarterly construction cost report (QCR) and its Crane Index®. Together, the two documents provide a dynamic perspective on the North American construction industry.
Announcing the new studies, Julian Anderson, FRICS FAACE, President of RLB North America and Chairman of its Global Board, said, “Our outlook for the industry through the end of the year remains positive.” RLB’s research suggests that between July 1, 2017 and October 1, 2017, the national average increase in construction costs was approximately 1%. Likewise, the Crane Index® shows the national tower crane tally is holding relatively steady, too; 383 cranes were counted in January 2018, compared to the 381 in July 2017, for a difference of .5%.
Boston, Calgary, Chicago, Denver, Honolulu, Los Angeles, New York, Phoenix, Portland, San Francisco, Seattle, Toronto, and Washington, D.C. are some of the cities that are profiled in these editions of the QCR and Crane Index®. Key highlights include:
San Francisco: With a 7.63% increase in construction costs and an 18% jump in its crane count, the City by the Bay remains robust. Driven mainly by job growth in the tech industry, construction in commercial, office, and mixed-use/residential sectors are growing. Of the cranes on the skyline, the majority of them (38%) are servicing commercial projects. The South of Market (SoMa) area is particularly busy, with close to double the number of tower cranes compared to the July 2017 edition of the Crane Index. Additional construction activity is evident throughout the city. Some of the most significant additions to the skyline currently in progress are the Salesforce Tower (61 stories), 181 Fremont (70 stories), and the Chase Center complex. There is no slowdown forecast for construction in the city, as five new crane applications have been filed since May 2017.
Seattle: Seattle’s construction market remains healthy, despite the crane count falling below 50 for the first time since 2015 and a 5.21% increase in construction costs. The pace of construction is steady, with cranes rising quickly to replace those taken down when projects are completed. Multiple sectors remain active, including mixed-use (which comprises a third of the count), followed by residential, education, commercial, healthcare, hospitality, and transportation. Notable areas of development include South Lake Union, Capitol Hill, and the University District. Amazon continues to be a powerful force in the market; its hiring binge has fueled the local economy, driving up wages and lowering unemployment. The forecast for construction in Seattle is positive, with many projects scheduled in 2018.
· Top crane count cities: Toronto (88), Seattle (45), Chicago and Los Angeles (36 each)
· Top three sectors, by crane count (North America): Residential (44%), Mixed-use (26%), Commercial (12%)
· Top three markets showing an increase in construction costs: San Francisco (7.63%), Los Angeles (7.08%), Portland (5.76%)
· Markets showing a decline in construction costs: Honolulu (-0.51%) is the only city surveyed where construction costs have slipped
Rider Levett Bucknall is an award-winning international firm known for providing project management, construction cost consulting, and related property and construction advisory services—at all stages of the design and construction process.