Minneapolis

Construction Cost Index, Q3 2021

Construction Cost Index

(JANUARY 2009 = 100)

The Mortenson Cost Index is showing a single quarter increase of 2.9% nationally and 2.2% in Minneapolis. Over the last twelve months, costs increased 19.2% nationally and 20.3% in Minneapolis.

Construction Employment

(an indicator of future wage and activity trends)

Construction employment in the Minneapolis metro region has stabilized from the sharp declines seen earlier in the pandemic. Non-residential building construction employment in Minneapolis totaled 19,200 in September. This is 1% higher than September 2020 and approaching pre-pandemic levels. Residential construction employment has remained stable throughout the pandemic.

Material Pricing Changes

(Cumulative 2019 to Q3 2021)

Although we have seen some decreases, costs for building materials remain escalated due to manufacturing issues, supply chain delays, and raw material shortages.

For a more specific update or questions regarding this report, please contact:

Frank Kosmach
Chief Estimator
frank.kosmach@mortenson.com
763.287.5641

Kelly McNamara
Vice President Operations
kelly.mcnamara@mortenson.com
763.287.5915

Advice for Building Owners

 

The construction market, like many, is experiencing unprecedented inflationary headwinds in 2021, which are presenting unique challenges. Market volatility continues as trade partners work through supply chain and labor availability challenges. The rate of increase is trending lower but still substantially above historical levels and remains variable.

This variability is driven by multiple factors including project type, time to market, geography, etc. Many of our projects have increased less than the reporting from our trade partners for this index, some as low as 3-5%. While less than experienced earlier this year, this persistent fluctuation continues to present unique challenges for projects in the near term and agility in our planning is required.

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.