Building Costs Increase in the Second Quarter of 2023

Building costs increase driven by the continued shortage of skilled labor in numerous markets. Although we have seen some stabilization in material lead times, we continue to experience the impacts of considerably long lead times as it relates to MEP Equipment.

Turner Construction Company announced that the Second Quarter 2023 Turner Building Cost Index - which measures costs in the non-residential building construction market in the United States—had increased to the value of 1365. This represents a 1.19% quarterly increase from the Fourth Quarter 2022 and a 6.39% yearly increase from the Second Quarter 2022.

“Certain geographic regions are experiencing robust markets as large industrial, data center and energy-related projects move forward. These regions are experiencing above-average increases in wage rates. Promoting job opportunities in growing markets and offering attractive work environments for the workforce alleviates some of the pressure in a tight labor market,” said Attilio Rivetti, the Turner vice president responsible for compiling the Cost Index. Attilio continued, “Early coordination and participation of trade contractors and suppliers serve to mitigate the impact of long lead times for equipment on construction schedules.” 

Turner has prepared the construction cost forecast for more than 80 years. 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 these factors into account.