In its latest quarterly survey of U.S. construction costs, international property and construction cost-consultant firm Rider Levett Bucknall (RLB) reports that construction spending in the United States is on track to increase approximately 6% in 2016. Overall, the national average increase in construction costs for the quarter was approximately 1.5%.
Julian Anderson, President of RLB North America, said, “In our new report, we see continued positive news for the health of the construction industry, a slight uptick in the rate cost escalation, and a sharp decrease in the rate of construction unemployment. Looking ahead, barring a Democratic sweep of the Presidency and Congress, we do not see any big, near-term changes in either private- sector or public-sector construction activity.”
While current spending is falling short of the 20% growth seen by select segments of the industry in 2015, the outlook for the construction field as a whole is reasonably favorable. Continued low interest rates, rising consumer confidence, and healthy job growth also contribute to the guarded optimism.
Going forward, RLB sees a 5% expansion in construction spending for 2017. Based on a recent consensus forecast by the Urban Land Institute, the firm notes that past gains in activity may start to slow, suggesting the latter stages of a real estate cycle. National economic growth has been slower than previously anticipated, in part due to increasing national and international vulnerabilities. Combined with weakened domestic manufacturing output and investor uncertainty pending the results of the U.S. presidential election, these conditions may begin to create downward pressure on the construction industry in 2017.
About the Rider Levett Bucknall Quarterly Construction Cost Report
Rider Levett Bucknall reports on the comparative costs of construction in 12 U.S. cities on a quarterly basis, indexing them to show how costs are changing in each city, as well as against the costs of the other 11 locations. Together with additional international and national cost compendia, the cost research equips clients with complete and relevant information to assist in business decisions.
Related Stories
Market Data | Jun 21, 2019
Architecture billings remain flat
AIA’s Architecture Billings Index (ABI) score for May showed a small increase in design services at 50.2.
Market Data | Jun 19, 2019
Number of U.S. architects continues to rise
New data from NCARB reveals that the number of architects continues to increase.
Market Data | Jun 12, 2019
Construction input prices see slight increase in May
Among the 11 subcategories, six saw prices fall last month, with the largest decreases in natural gas.
Market Data | Jun 3, 2019
Nonresidential construction spending up 6.4% year over year in April
Among the 16 sectors tracked by the U.S. Census Bureau, nine experienced an increase in monthly spending, led by water supply and highway and street.
Market Data | Jun 3, 2019
4.1% annual growth in office asking rents above five-year compound annual growth rate
Market has experienced no change in office vacancy rates in three quarters.
Market Data | May 30, 2019
Construction employment increases in 250 out of 358 metros from April 2018 to April 2019
Demand for work is outpacing the supply of workers.
Market Data | May 24, 2019
Construction contractors confidence remains high in March
More than 70% of contractors expect to increase staffing levels over the next six months.
Market Data | May 22, 2019
Slight rebound for architecture billings in April
AIA’s ABI score for April showed a small increase in design services at 50.5 in April.
Market Data | May 9, 2019
The U.S. hotel construction pipeline continues to grow in the first quarter as the economy shows surprising strength
Projects currently under construction stand at 1,709 projects/227,924 rooms.
Market Data | May 9, 2019
Construction input prices continue to rise
Nonresidential input prices rose 0.9% compared to March and are up 2.8% on an annual basis.