Construction Cost Index
(JANUARY 2009 = 100)
The Mortenson Cost Index is showing a single quarter increase of nearly 5% nationally and 2.4% in Chicago. Over the last twelve months, costs increased 6.7% nationally and 4.3% in Chicago.
(an indicator of future wage and activity trends)
Construction employment in the Chicago metropolitan area contracted last year in response to the pandemic and has not yet rebounded in the early months of 2021. The latest figures released from the Bureau of Labor Statistics show a 5% drop in year-over-year construction employment growth.
Material Pricing Changes
(Cumulative 2019 to Q1 2021)
Raw material shortages and manufacturing issues have contributed to sharp increases in building materials over the past year.
Advice for Building Owners
The data collected for the Mortenson Cost Index is showing an increase of nearly 5% nationally and 2.4% in Chicago for the first quarter of 2021. This is the largest single quarter increase since its inception, driven by significant disruptions to the supply chain and increases in commodity costs. This will potentially moderate throughout the year as capacity returns to pre-pandemic levels. The current upward pressure is somewhat offset by a competitive market with subcontractors working to fill their capacity.
As markets rebound with increased private and government spending, the industry may see additional upward pressure on pricing. We continue to monitor this somewhat unpredictable market and know that a resilient, agile approach to projects will be necessary in the months to come.
About this report: The Mortenson Construction cost index is calculated quarterly by pricing a representative non-residential construction project in Chicago and other geographies throughout the country. Local employment figures are from the Bureau of Labor Statistics.
For a more specific update or questions regarding this report, please contact:
Vice President, General Manager