Leading general contractor reports rise in construction costs

Construction costs in the fourth quarter of 2006 increased 2.12 percent over third quarter 2006 and 9.65 percent over fourth quarter 2005, according to the cost index from New York-based Turner Construction Co.

Turner officials said in a Jan. 3 company release that the growing labor shortage and increasing demand in the commercial construction market drove the cost increase.

“The underlying strength of the U.S. economy continues to support ongoing growth in the commercial construction market,” said Karl F. Almstead, Turner vice president, in the release. “In spite of stabilizing commodity prices and the downturn in the residential market, commercial construction costs continue to rise.”

Turner’s cost index is determined by nationwide factors including: labor rates and productivity, material prices, and the competitive condition of the marketplace, according to the release. Turner issues its forecast quarterly.