Construction Cost Index
(JANUARY 2009 = 100)
Nonresidential construction costs increased 2 percent year-over-year in Chicago and 2.1 percent nationally. The Chicago index is 2 points higher than our national index.
(an indicator of future wage and activity trends)
Construction employment in the Chicago metropolitan area initially contracted sharply in response to the COVID-19 pandemic, but those losses are beginning to moderate. The latest BLS statistics show a moderate 3% decline in year-over-year construction employment growth overall in 2020.
Building Component Trends
(Q4 2020 vs. Q3 2020)
• Steel/Metal Decking (4.2%)
• Metal Stair Fabrication (3.4%)
• Plumbing Systems (1.9%)
• Wall Covering (1.8%)
• Site Utilities (1.5%)
• Alum. Entrances/Storefronts (1.5%)
• HVAC Systems (1.5%)
• Steel Framing/Stair Erection (1.2%)
• Gypsum Board Systems (1.2%))
• Electrical Systems (1.1%)
• Finish Carpentry & Arch. Millwork
• Cast-In-Place Concrete
• Unit Masonry
• Deck Formwork
• Electric Traction Elevators
• Resilient Flooring & Carpeting
• Fire Protection Systems
• Install Reinforcing Steel
Note: All other components (14% of the index) were flat.
Costs for steel/metal decking and metal stair fabrication experienced the most notable increases in the Chicago index this past quarter. All other components were flat or saw moderate increases.
Advice for Building Owners
Our Chicago construction cost index increased 2 percent overall in 2020. Downward pressure continues as some trade contractors and suppliers work to rebuild their backlogs. However, due to pandemic-related disruptions to supply chains we are seeing significant increases for PVC, steel, copper, lumber and glass. We anticipate a continued competitive market with material price fluctuations in the first half of 2021. We recommend planning for project costs to increase 3% in 2021.
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