Construction costs to edge up in first quarter 2007

Labor shortage and high commercial demand drive increase

According to the Building Cost Index from Tuner Construction Co. of New York,  building material costs will increase in the first quarter of 2007. Costs will rise a projected 1.59 percent compared to the fourth quarter of 2006 and 8.49 percent compared to the first quarter of 2006, Turner officials reported in a Feb. 28 release.

“The volume of available work and limited availability of skilled labor in the commercial construction market continue to drive increased pricing from specialty contractors,” Karl Almstead, vice president of Turner, said in the release. “The concrete, curtain wall, elevators, mechanical and electrical trades remain influenced by these factors in most geographic markets.”

However, Almstead said the predicted 1.59 percent increase represents the smallest quarter-to-quarter increase since 2004.

"In spite of the high domestic demand, the availability of materials does not seem to be a concern," Almstead said. "Generally, commodity and material price escalation has slowed over the past quarter and appears to be following that pattern into 2007."