International property and construction consultancy firm Rider Levett Bucknall has released its new quarterly cost report for North America. With data up to date to July 1 and featuring construction cost information for 14 U.S. and Canadian markets, the QCR provides a statistical view of the state of the construction industry, detailing indicative construction costs for eight building sectors.
Upon publication of the QCR, Julian Anderson, FRICS, president of RLB North America, said, “While we expect that construction will face a downturn in the next year, this doesn’t necessarily mean that the construction industry is in trouble; it does mean a slowdown over the next 12 to 18 months, which may seem like a recession after this frenetic pace of the last few years.”
For the third quarter of 2019, the Construction Industry Confidence Index is 51, reflecting a drop of seven points from the second quarter of 2019, and 19 points year-over-year. This rating is still above 50, which is considered the threshold for negative sentiment regarding industry growth.
- RLB reports that from April 1 to July 1, U.S. national average increase in construction costs was approximately 1.3%
- San Francisco, California (1.87%), Honolulu, Hawaii (1.66%), Chicago, Illinois (1.65%), Seattle, Washington (1.57%) and Phoenix, Arizona (1.31%) are the markets with cost increases above the national average during the third quarter
- In Canada, Toronto tallied a construction cost index increase of 8.84%, while costs in Calgary grew 0.59%
Key fiscal barometers
- In a downward trend from previous quarters, the annualized U.S. gross domestic product was 2%
- The Architectural Billings Index continues to track below 50
- Construction unemployment dips to 4.0%, down from the previous quarter’s 5.2%