INFLATIONARY PRESSURE CONTINUES FOR NON-RESIDENTIAL CONSTRUCTION
The data collected for the Mortenson Cost Index is showing an increase of 3.3% nationally and 4.0% in Chicago for the second quarter of 2022. The construction market, as with many, continued to experience inflationary headwinds through the first half of the year. Material costs in Q1 increased consistent with expectations and Q2 costs followed the same trend line across the markets tracked (<4.0%).
CONSTRUCTION COST INDEX
(JANUARY 2009 = 100)
The Mortenson Cost Index is showing a single quarter increase of 3.3% nationally and 4.0% in Chicago. Over the last twelve months, costs increased 11.8% nationally and 13.3% in Chicago.
Building construction employment in the Chicago metro region increased to 29,600 in June 2022. This is 2% higher (600 jobs) compared to June 2021. Labor availability will remain a top concern throughout 2022.
Source: Bureau of Labor Statistics
MATERIAL PRICING CHANGES
(Cumulative Q2 2020 to Q2 2022)
Costs for building materials remain escalated due to continued increases in shipping costs, fuel surcharges, product lead times, and material shortages.
1. Bureau of Labor Statistics, U.S. Department of Labor. (2022, July 14). Producer Price Indexes—June 2022. https://www.bls.gov/news.release/pdf/ppi.pdf
2. Bousquin, J. (2022, July 15). Peak pricing? June’s PPI shows signs of relief for construction materials. https://bit.ly/3J5B19O
3. Federal Reserve System. Beige Book – June 1, 2022. https://www.federalreserve.gov/monetarypolicy/beigebook202206.htm
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.