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News / May 16 2012 - RLB USA reports anaemic, yet consistent const growth, cost increases
National Construction Cost Index
RLB USA reports anaemic, yet consistent const growth, cost increases
According to the latest construction cost report from property and construction consultant Rider Levett Bucknall, construction cost inflation remained moderate through the first quarter of 2012, as the economic laws of supply and demand continue to mute construction price increases in what is still a slow-recovering economy. The national average increase in construction bid prices from January to April of this year was only 0.4%.
From among the 11 cities where Rider Levett Bucknall tracks construction costs, Boston, Honolulu, Las Vegas and Seattle reported higher relative bid price increases of between 0.6% and 0.8%, while Los Angeles, Portland and San Francisco all barely registered bid prices increases of less than 0.1%.
According to Rider Levett Bucknall president and global board member, Julian Anderson, “While less than expected, the pace of economic expansion in the first quarter of 2012 has followed a positive upward trend with GDP growth for the period registering 2.2%.
“Nevertheless, to overcome the damage the recession did to jobs, income, wealth and confidence, the economy still needs to achieve consistently stronger growth and job production.”
Growth projections for the construction industry, however, are even more reserved than for the economy as a whole as the American Institute of Architects’ Architectural Billings Index (a measure of future non-residential spending activity nine to twelve months out) continues to report anemic expansion best characterized as “bouncing along the bottom.”
On a brighter note, Rider Levett Bucknall anticipates that construction of multifamily units will lead the U.S. building industry again this year, allowing “housing” to contribute to growth for the first time in several years.
“Single-family home starts – which fell to a five-year low in 2011 – are starting to recover,” said Anderson. “We expect that activity will continue to increase through 2012 as the overall economy and employment opportunities improve.”
News / May 16 2012 - RLB USA reports anaemic, yet consistent const growth, cost increases