Denver

Construction Cost Index, Q4 2020

Construction Cost Index

(JANUARY 2009 = 100)

Nonresidential construction costs were flat year-over-year in the Denver region and increased 2.1 percent nationally.

Construction Employment

(an indicator of future wage and activity trends)

Construction employment in the Denver area initially fell in response to the COVID-19 pandemic, but those losses have largely been recovered. The latest BLS statistics show only a slight decline in year-over-year construction employment growth.

Building Component Trends

(Q4 2020 vs. Q3 2020)

Increase

• Steel/Metal Decking Material (6.6%)
• Electrical Systems (4.2%)
• Painting & Wall Covering (3.7%)
• Steel Doors & Frames (3.5%)
• Reinforcing Steel Material (3.0%)
• Roofing System (1.7%)

• Floor & Wall Tile (1.5%)
• Steel Framing/Stair Erection (1.4%)
• Site Utilities (1.2%)
• Fire Protection Systems (1.2%)
• Unit Masonry (1.1%)
Plumbing Systems (1.0%)


Flat

• Gypsum Board Systems
• HVAC Systems
• Earthwork
• Alum. Entrances & Storefronts

• Electric Traction Elevators
• Deck Formwork
• Finish Carpentry & Arch. Millwork
• Cast-In-Place Concrete


Decline

• Preformed Metal Wall Panels (-2.4%)


Note: All other components (13% of the index) decreased 1.9%.

Costs increased for twelve components of the Denver index this past quarter, most notably for steel-related materials, electrical systems, and painting/wall covering. Costs declined for preformed metal wall panels. All other components of the index saw flat to moderate increases.

Advice for Building Owners

 

Our Denver construction cost index was flat 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. This, together with losses in productivity due to ongoing COVID-19-related procedures will offset much of the downward pressure in the market. We recommend planning for project costs to increase 2% in 2021.

About this report: The Mortenson Construction cost index is calculated quarterly by pricing a representative non-residential construction project in Denver 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:

Dan Mickelberry
Chief Estimator
dan.mickelberry@mortenson.com
720.259.4875

Brian Holland
Director of Business Development
brian.holland@mortenson.com
720.920.4463