International property and construction consultancy firm Rider Levett Bucknall (RLB) has released its new Quarterly Cost Report (QCR) for North America. With data current to mid-Q4 and featuring construction cost information for 14 U.S. and Canadian markets, the QCR provides a statistical view of the state of the construction industry, detailing indicative construction costs for eight building sectors.
“The average increase in construction costs from 2020 through 2021 was 7.42%,” said Julian Anderson, FRICS, president, RLB North America. “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. 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.”
Market highlights
- RLB reports that from July 1, 2021-Oct. 1, 2021, the U.S. national average increase in construction costs was approximately 1.5% (7.42% annualized).
- Boston (2.66%), Chicago (2.28%), New York (1.92%), San Francisco (1.99%) and Seattle (5%) 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, OR (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.