Non-residential construction costs rise 2.2% in Denver
Mortenson has just released its Q2 2022 Construction Cost Index report for Denver and other major US markets. The overall construction cost index across all markets rose as expected, hitting a new high. According to data from the second quarter, which ended June 30, nonresidential construction costs rose 2.2% in Denver, a full point below the national average of 3.2%, but still up 13.1% over the previous 12 months.
“As you might expect, while construction spending in Denver remains robust, many factors continue to strain suppliers, contractors and projects,” said Brian Holland, director of business development at Mortenson. . “While it is difficult to predict what the future holds for the economic forces in the construction industry, Mortenson is focused on creating value and efficiency at all levels and on building the best possible team for each project. We know our customers are better off because of these efforts.
In addition to Denver, the following quarterly average price changes were seen in markets tracked by Mortenson: Chicago (4.0%); Milwaukee (3.9%); Minneapolis (3.3%); Phoenix (2.55%); Portland (3.6%); and Seattle (2.9%). Based on market data, observations and insights, Mortenson sees much of the same development in the second half of the year.
According to the report, product delivery times, fuel price increases, labor costs and availability continue to challenge suppliers, contractors and projects. The recent Bureau of Labor Statistics report on the Producer Price Index indicated an easing in input prices in categories such as structural steel, reinforcing steel and lumber. However, many have made further progress. Upcoming US economic data for the third quarter could indicate whether broader trends are beginning to emerge.
The Mortenson Construction Cost Index is calculated quarterly by pricing representative non-residential construction projects in various metropolitan areas. This effort is part of a portfolio of industry insights and market research provided by Mortenson.
Download the Mortenson Construction Cost Index HERE