Non-residential construction costs rose in the second quarter as larger urban markets appear to be expanding more rapidly than other regions, according to Turner Construction Co.'s most recent Building Cost Index.
Turner's Second Quarter 2013 Building Cost Index measuring costs in the U.S. non-residential building sector was 859, an increase of 1.18% from the previous quarter and 4% from the same quarter a year ago.
In addition to rising activity in larger urban areas, contributing to the increase is the limited capacity among trade contractors with the available resources to manage and work on large, complex projects, said Karl F. Almstead, the Turner vice president in charge of the Cost Index.
"While lower global demand is maintaining downward pressure on material and equipment costs, there is upward pressure on specialty equipment and material costs in growing building types such as data centers," Almstead said.
Market fundamentals for major non-residential construction sectors are generally positive, with expectations for good, but not great, growth in construction activity in 2013 and 2014, American Institute of Architects (AIA) Chief Economist Kermit Baker said Monday during a mid-year construction forecast.
With an annual construction volume of $9 billion, Turner is the largest builder in the U.S., ranking first or second in the major market segments of the building construction field, including healthcare, education, sports, commercial, and green building.
The firm is a subsidiary of HOCHTIEF, a publicly traded company, and one of the world's leading international construction service providers.