Rider Levett Bucknall Tracks North American Construction Trends in New Quarterly Cost Report and Cra
International property and construction consultancy firm Rider Levett Bucknall (RLB) has released its latest Crane Index and Quarterly Cost Report (QCR) for North America. With data current to April 1, 2019 and featuring construction cost information for 14 US and Canadian markets, the QCR provides a statistical view of the state of the construction industry, detailing indicative construction costs for eight building sectors. The biannual Crane Index, compiled with information gathered from three sources—a one-day physical count of fixed-tower cranes on city skylines, a survey of RLB experts on the ground in each location, and interviews with local crane suppliers—provides a visceral view of the construction industry in key markets.
Upon publication of the QCR, Julian Anderson, FRICS, President of RLB North America, said, “As the industry continues to adapt to a chronic craft-labor shortage and on-again/off-again trade wars and tariffs, several markets appear to be softening as they enter the ‘valley’ part of the construction cycle.”
A healthy project pipeline
Broadening the scope of the QCR, RLB cites historical and current data from the Construction Backlog Indicator (CBI) to enhance perspective of national trends. From 2011 through 2018, the monthly backlog of commercial, institutional, industrial, and infrastructure projects is up 17%. With a 9.15 month average duration in 2018, the CBI is the highest in a decade.
Market and Crane Index highlights
RLB reports that from January 1, 2019 to April 1, 2018, U.S. national average increase in construction costs was approximately 1.12%
San Francisco (2.50%), Chicago (2.11%), Seattle (1.56%), Honolulu (1.53%), Portland (1.28%), and Phoenix (1.14%), and are the markets that showed the greatest cost increases above the national average during the second quarter
Los Angeles was the only market to show a decrease in quarterly construction costs, dropping 1.22%
In Canada, Toronto tallied a slight construction cost increase of .54%, while Calgary declined 1.04%
Crane counts dipped in Honolulu, New York, San Francisco, and Seattle; in Boston, Denver, Los Angeles, and Portland they remained steady; and the count increased in Calgary, Chicago, and Toronto
Key fiscal barometers
The U.S. Gross Domestic Product closed out Q1 2019 at 3.2%, up from the 2018 year-end of 2.6%
At 47.8, the Architectural Billings Index is the lowest it has been in five years
Construction unemployment is holding steady at 5.2%, a nominal change from Q1