Construction Cost Index, Q4 2020

Construction Cost Index

(JANUARY 2009 = 100)

Nonresidential construction costs increased 1.7 percent year-over-year in Phoenix and 2.1 percent nationally. Our Phoenix index is 2 points above our national index.

Construction Employment

(an indicator of future wage and activity trends)

Commercial construction employment continued to grow in the Phoenix metropolitan area in 2020, but at more moderate pace compared to the last several years. Construction employment grew 3% overall in 2020.

Building Component Trends

(Q4 2020 vs. Q3 2020)


• Install Reinforcing Steel (5.0%)
• Gypsum Board Systems (4.6%)
• Site Utilities (4.4%)
• Reinforcing Steel Material (3.6%)
• Entrances & Storefronts (3.0%)

• Preformed Metal Wall Panels (3.0%)
• Steel/Metal Decking Material (2.3%)
• Metal Stair Fabrication (2.1%)
• Electrical Systems (1.0%)


• Steel Framing & Stair Erection
• Unit Masonry
• HVAC Systems
• Electric Traction Elevators
• Earthwork

• Deck Formwork
• Cast-In-Place Concrete
• Plumbing Systems
• Fire Protection Systems
• Finish Carpentry & Arch. Millwork

Note: All other components (14% of the index) were flat.

Costs increased for nine components in the Phoenix index this past quarter. Reinforcing steel material and installation, gypsum board, and site utilities saw the most significant increases. Most components experienced flat to moderate increases.

Advice for Building Owners


Our Phoenix construction cost index increased 1.7 percent 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 3% in 2021.

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

Ty Bohlender
Chief Estimator

Tammy Carr
Director of Business Development