Construction Cost Index
(JANUARY 2009 = 100)
Both the Seattle and national construction cost indexes tracked upward in 2019. The national index increased 3.3 percent since year-end 2018 and the Seattle index increased 2.1 percent, but the Seattle index is still four points higher than our national index.
(an indicator of future wage and activity trends)
Construction employment in the Seattle region grew 4 percent in 2019. Low unemployment in the area will continue to drive a tight labor market. We anticipate modest construction employment gains in 2020.
Building Component Trends
(Q4 2019 vs. Q3 2019)
• Steel Framing & Stair Erection (5.0%)
• Suspended Acoustical Ceilings (4.5%)
• Plumbing Systems (2.7%)
• Deck Formwork (2.0%)
• Asphalt Paving (1.8%)
• Roofing System (1.6%)
• Gypsum Board Systems (1.1%)
• HVAC Systems
• Electrical Systems
• Cast-In-Place Concrete
• Struc. Steel & Metal Decking
• Electric Traction Elevators
• Finish Carpentry & Arch. Millwork
• Unit Masonry
• Resilient Flooring & Carpeting
• Fire Protection Systems (-2.4%)
• Aluminum Entrances/Storefronts (-3.2%)
Note: All other components (14% of the index) increased 0.1%.
While the majority of building components that make up the index saw flat to moderate cost increases in the most recent quarter, two components experienced relatively higher growth and two components declined.
Advice for Building Owners
The Seattle construction cost index ended 2019 at an all-time high and is tracking higher than our national index. While we continue to monitor the impact of both geopolitical and economic uncertainty, all signs point to stability for the construction industry in 2020. The Dodge Momentum Index (a leading indicator of future construction activity) increased in December, and there is a strong backlog of work in the market. Construction employment and materials costs should remain steady for the foreseeable future. We recommend owners plan on a 3% to 3.5% increase in 2020.
About this report: The Mortenson Construction cost index is calculated quarterly by pricing a representative non-residential construction project in Seattle 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:
Director of Business Development