Dallas-based The Turner Corp., the nation's leading general builder, announced on June 16 that construction costs in the second quarter of 2006 are projected to increase over the first quarter of 2006. According to the Turner Building Cost Index, the second-quarter 2006 index will rise to 787, showing a 2.75-percent increase over the first quarter 2006 index of 766 and a 11.89-percent increase over the second quarter 2005 index of 704. Turner has made its quarterly forecast for more than 50 years.
According to Karl F. Almstead, the Turner vice president responsible for the Cost Index: "The upward cost pressure from commodities such as cement, aluminum, copper, asphalt, and hydrocarbon energy due to domestic and global demand are driving up concrete, masonry, curtainwall, mechanical, electrical, and paving pricing. Markets with significant volumes of available work continue to stretch the local labor and subcontractor resources."
Turner continues to work though preconstruction planning and adoption of alternative procurement strategies to bring a level of predictability to this volatile market.
Used widely by the construction industry and federal and state governments, the building costs and price trends tracked by the Turner Building Cost Index may or may not reflect regional conditions in any given quarter. The Cost Index is determined by several factors considered on a nationwide basis - labor rates and productivity, material prices, and the competitive condition of the marketplace. This index does not necessarily conform to other published indices because others do not generally take all of these factors into account.
This article was reprinted with permission from The Turner Corp. To find out more, visit (www.turnerconstruction.com).