"Commodity
Pricing Continues to Drive Construction
Costs Upward Despite Trade Contractor
Competition Heating Up", (c) Wall St.
Journal Market Watch, 15 September, 2008
Turner Construction
Company, the nation's leading general
builder, today announced that the Third
Quarter 2008 Turner Building Cost Index,
which projects domestic commercial building
construction costs, has increased by 1.77
percent over the Second Quarter 2008 and
6.49 percent over the Third Quarter 2007.
According to Karl F.
Almstead, the Turner vice president
responsible for the Turner Building Cost
Index said, "Construction costs are
escalating at rates higher than the Consumer
Price Index (CPI) and Producer Price Index (PPI)
in large part due to increasing prices for
construction material. Price increases for
steel, non-ferrous metals, petroleum based
products and energy costs for both the
manufacturing and transportation of
construction materials are driving
construction cost increases."
"Wage and benefit
adjustments are generally higher than they
were a year ago, reflecting the continuing
strong demand on the skilled labor
workforce. However, increasing trade
contractor competition in many market areas
is offsetting some of the material and labor
increases," stated Almstead.
Turner has prepared the
construction cost forecast for more than 80
years.
Approximately 90% 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 high quality pre-construction
phase services and utilizing alternative
procurement strategies, Turner continues to
effectively serve its clients and manage the
market risks associated with cost escalation
issues.
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,
including 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
