Construction Cost Index
(JANUARY 2009 = 100)
Compared to this time last year, costs have increased 2.5 percent in our Minneapolis index and 1.7 percent nationally. Our Minneapolis index is 7 points below our national index.
(an indicator of future wage and activity trends)
Commercial construction employment in Minneapolis has contracted sharply in 2020 as a result of COVID-19, but the BLS statistics through August indicate that residential construction employment has not yet been impacted.
Building Component Trends
(Q3 2020 vs. Q2 2020)
• HVAC Systems (5.1%)
• Electrical Systems (3.2%)
• Electric Traction Elevators (3.0%)
• Earthwork (2.7%)
• Plumbing Systems (1.0%)
• Reinforcing Steel Material (1.0%)
• Cast-In-Place Concrete
• Metal Stair Fabrication
• Finish Carpentry & Arch. Millwork
• Gypsum Board Systems
• Alum. Entrances & Storefronts
• Structural Steel/Decking Material
• Deck Formwork
• Steel Framing & Stair Erection
• Roofing System
• Unit Masonry
• Resilient Flooring & Carpeting
• Painting & Wall Covering
• Fire Protection Systems
• Preformed Metal Panels (-10.0%)
Note: All other components (14% of the index) were flat.
Costs increased for several building components in the Minneapolis index this past quarter. Earthwork, concrete, and steel doors and frames saw the most notable increases. Flooring, paint and wall coverings, and reinforcing steel saw significant declines. Other index components were flat or saw moderate increases.
Advice for Building Owners
Overall, we have seen construction costs remain flat in 2020. While there is significant downward pressure as trade contractors and suppliers look to rebuild their backlogs, there are also upward pressures on costs. The global coronavirus pandemic and recent natural disasters in the U.S. have resulted in supply chain disruptions, driving cost increases for many materials. The most notable increases have been seen for lumber, PVC, steel and copper. In fact, costs for lumber have doubled since March. We expect to see overall project costs remaining flat with some continued volatility in pricing as the market adjusts to ongoing events.
About this report: The Mortenson Construction cost index is calculated quarterly by pricing a representative non-residential construction project in Minneapolis 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:
Strategy and Market Development Director