Mortenson Sees Seattle Construction Cost Increasing 4.0 – 4.5% in 2017

Commercial Building Boom Shows No Signs of Slowing

Seattle’s construction employment and the cost of materials and components continue to climb, outpacing national trends.

Mortenson Construction has released its quarterly Construction Cost Index report for Seattle along with five other metropolitan areas in the U.S. According to the report, which details non-residential construction market trends in the fourth quarter of 2016, Seattle construction employment is back to double-digit growth, while the cost of building components and materials continues to rise.

The acceleration of construction employment growth to 14 percent in late 2016 marks a shift from a brief period of slowing seen in 2015 and early 2016. Construction employment and wage growth are key indicators of future activity trends, and also reflect the shortage of skilled craft workers.

Once again, Seattle’s cost index steadily outpaced the national average – a trend the city has sustained for some time. Construction costs for non-residential construction labor, material and equipment in Seattle grew 0.8 percent as compared to the previous quarter.

As a result, Mortenson recommends building owners plan on a cost growth of 4 - 4.5 percent in the next 12 months.

“It’s important to keep in mind that year-over-year data can sometimes exaggerate the significance of a slight decline or increase, particularly because the strength of the prior year can impact the current year’s figures,” said Mark Wagner, chief estimator at Mortenson Construction in Seattle. “While these numbers have ebbed and flowed, the one constant is strong employment growth each quarter. With a nation-leading 62 cranes dotting the Seattle skyline, and a bevy of projects in the pipeline, it’s no surprise that materials costs and construction employment are on the rise.”

Building materials and components in Seattle experiencing the highest cost increases in the fourth quarter of 2016 (as compared to Q3 2016) included traction elevators, structural steel/decking and deck formwork. Categories that experienced some growth were gypsum board systems, cast-in-place concrete and earthwork. All other categories remained flat.

Mortenson tracks and reports on six metropolitan areas in the U.S. including Minneapolis, Milwaukee, Chicago, Denver, Phoenix and Seattle. The Mortenson Construction Cost Index is calculated quarterly by pricing representative non-residential construction projects in various metropolitan areas. It is part of a portfolio of industry insights and market studies provided by Mortenson. The Construction Cost Index is available for download at