Material and Labor Cost Escalation Continues to Drive Increases in Construction Costs

“Material and labor cost escalation continues to be driven by the impact of volatile fuel prices, instability in Europe, and global supply chain impacts. The shortage of skilled labor is driving higher than usual labor rate increases. Labor shortages and uncertainty of some key building materials availability have pushed trade contractors to be more selective about the projects they pursue, avoiding riskier jobs, lessening competition, and ultimately impacting prices,” said Attilio Rivetti, the Turner vice president responsible for compiling the Cost Index. Attilio continued, “A project specific comprehensive procurement strategy can reduce the risk of prolonged lead times and price escalation.” 

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 of these factors into account.

Click here to see the Second Quarter 2022 report.