Construction Costs Forecasts to Decline Further in Fourth Quarter

Decreased demand for building and increased trade contractor competition continues to deflate construction pricing

New York, N.Y., — Turner Construction Company announced that the Fourth Quarter 2009 Turner Building Cost Index, which measures non-residential building construction costs in the United States, has decreased by 2.07% from the Third Quarter, continuing the decline which began in the First Quarter of this year. Construction costs have decreased by 12.62% since the beginning of the year. The Turner Building Cost Index number for Fourth Quarter 2009 is 803.

Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index said, “The decrease in construction costs is reflective of decreased private sector development and investment. Commodity prices have slightly increased due to global demand, but have not resulted in upward pressure on construction pricing.”

“The competitive condition in the building construction industry is driving labor to increase productivity, therefore, reducing labor costs,” said Almstead.

Approximately 90% of Turner's business is performed under contract arrangements where Turner provides extensive preconstruction planning services before the contract price is fixed and before construction starts. By providing preconstruction services and utilizing enhanced procurement strategies, Turner effectively manages the market risks associated with cost-related issues.

Turner has prepared the construction cost forecast for more than 80 years. Used widely by the construction industry and Federal and State governments, the building costs and price trends tracked by The Turner Building Cost Index may or may not reflect regional conditions in any given quarter. The Cost Index is determined by several factors considered on a nationwide basis, including labor rates and productivity, material prices and the competitive condition of the marketplace. This index does not necessarily conform to other published indices because others do not generally take all of these factors into account.