Building Cost Projections
COST PROJECTIONS BEGINNING FY25
THE PAST YEAR 2023
Nationally 2023
Inflation has eased somewhat after a few years of exceptionally high rates. Supply chain issues have eased in most areas except for switchgear, some HVAC components, generators, and some electrical components. The lack of skilled construction workers has multiple effects to the construction industry.
Locally 2023
Steel, concrete, roofing, and MEP prices trended up, however delivery delays eased somewhat. While construction starts decreased, construction spending significantly increased. Large construction project in the Kansas City and Wichita areas reduced the availability of subcontractors, most specifically in the southeast portion of the state. Kansas is investing an increase in funding for higher education and healthcare.
Brand loyalty often had to go to the wayside due to both cost and extended lead times. To maintain a construction schedule, substitutions from favored manufacturers have been made to more readily available brands.
Current Conditions
We are still seeing long delivery times for generators and automatic transfer switches, and a host of electrical and mechanical materials. The state of Kansas is continuing to fund large capital improvement projects and deferred maintenance projects.
FORCAST FOR FY25
Labor shortages and cost increases are easing as funding appropriations are increasing to meet the demand of the recent inflation. A reduction in inflation is easing, but inflation increases of the last few years will not go away. While still volatile, the inflation rate reduction is seeing a more favorable bidding climate and currently we are seeing more bidders for each project.
Cost Projections
Cost Projections
|
Yearly Cost Projections from FY24 |
Monthly Cost Projections from FY2024 |
|
|
FY25 |
6.00% |
0.005000 / month (6% / 12 months). |
|
FY26 |
10.00% |
0.004167 / month (10% / 24 months) |
|
FY27 |
13.00% |
0.003611 / month (13% / 36 months) |
|
FY28 |
18.00% |
0.003750 / month (18% / 48 months) |
|
FY29 |
22.00% |
0.003667 / month (22% / 60 months) |
These projections were compiled from multiple sources including AGC of America, US Bureau of Labor Statistics and Engineering News Record, McCownGordon and Turner Construction Cost Index
Historical Cost Indexes
|
Year ending in January |
Average Index |
% change |
Year beginning in January |
Average Index |
% change |
|
2023 |
1373 |
6.0 |
2012 |
830 |
2.10 |
|
2022 |
1295 |
8.0 |
2011 |
812 |
1.60 |
|
2021 |
1199 |
1.9 |
2010 |
799 |
-4.00 |
|
2020 |
1177 |
1.8 |
2009 |
832 |
-8.40 |
|
2019 |
1156 |
5.5 |
2008 |
908 |
6.30 |
|
2018 |
1096 |
5.60 |
2007 |
854 |
7.70 |
|
2017 |
1038 |
5.00 |
2006 |
793 |
10.60 |
|
2016 |
989 |
4.80 |
2005 |
717 |
9.50 |
|
2015 |
943 |
4.50 |
2004 |
655 |
5.40 |
|
2014 |
902 |
4.40 |
2003 |
621 |
0.30 |
|
2013 |
864 |
4.10 |
2002 |
619 |
1.00 |
(The above historical cost data was obtained at www.turnerconstruction.com/cost-index.)
