Construction Cost Index
(JANUARY 2009 = 100)
Our Chicago construction cost index kept pace with our national index over the last year. Costs have increased 3.2 percent year-over-year in Chicago and 3.3 percent nationally.
(an indicator of future wage and activity trends)
While construction employment in Chicago remains at healthy levels, year-over-year employment gains declined in 2019. The overall unemployment rate in Chicago –holding at 3.5 percent –will continue to drive a tight labor market. We expect flat to moderate construction employment gains in 2020.
Building Component Trends
(Q4 2019 vs. Q3 2019)
• Earthwork (2.5%)
• Site Utilities (3.2%)
• Wood Doors (1.1%)
• Cast-In-Place Concrete
• Plumbing Systems
• Unit Masonry
• HVAC Systems
• Electrical Systems
• Gypsum Board Systems
• Deck Formwork
• Finish Carpentry/Millwork
• Struct. Steel/Metal Decking Material
• Aluminum Entrances/Storefronts
• Steel Framing & Stair Erection
• Electric Traction Elevators
• Resilient Flooring/Carpeting
• Painting/Wall Covering
• Fire Protection Systems
• Install Reinforcing Steel
Note: All other components (15% of the index) increased 0.2%
Price changes for most building components in the Chicago cost index were flat in the past quarter, with just three components experiencing an increase higher than 1 percent.
Advice for Building Owners
The Chicago construction cost index ended 2019 at an all-time high and is on pace with our national index. While we continue to monitor the impact of both geopolitical and economic uncertainty, all signs point to stability in the construction industry in 2020. The Dodge Momentum Index (a leading indicator of future construction activity) increased in December, and there is a strong backlog of work in the market. Construction employment gains will be modest and materials costs are holding steady. We recommend owners plan on a 3% to 4% increase in 2020.
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