Domestic Nonresidential Markets Maintain Growth Trajectory in the Second Quarter

Turner Construction Company announced that the Second Quarter 2014 Turner Building Cost Index—which measures costs in the nonresidential building construction market in the United States—has increased to a value of 896. This reflects a 1.24 percent increase from the First Quarter 2014 and 4.31 percent yearly increase from the Second Quarter 2013.

Growth in nonresidential construction costs continues in the second quarter in virtually all domestic markets. Construction cost escalation is greater in urban centers experiencing high levels of construction activity and in markets with mega projects.

The labor cost component in markets experiencing increased volumes of construction activity and tight labor availability is adding to the upward pressure on construction costs. While raw material prices remain flat, costs of manufactured and engineered construction components are continuing to increase slightly.

Approximately 90 percent 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 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.