Market pressures maintain downward influence on construction costs
NEW YORK, NY — Feb. 24 — Turner Construction Company announced that the First Quarter 2010 Turner Building Cost Index, which measures non-residential building construction costs in the United States, has decreased by 0.5% from the Fourth Quarter 2009 and decreased 7.74% from the First Quarter 2009. Construction costs have decreased by 13.06% since their peak at the end of 2008. The Turner Building Cost Index value for First Quarter 2010 is 799.
Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index said, “The rate of decline in construction costs is not as dramatic as it was in 2009. The reduced volume of work remains the driving force behind the market’s downward pressure on costs in the non-residential building construction sector.”
“While there are signs of recovery in the economy, the construction industry trails the broader economy due to the time required for project planning and design. As the economic recovery strengthens, increased activity in project planning will provide an indication that the rebound in the construction industry is underway,” 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.
Turner is the leading general builder in the U.S., ranking first or second in the major segments of the building construction field. During 2008 Turner completed $10.7 billion of construction. Turner is the only builder offering clients a nationwide network of offices across the U.S. Founded in 1902, the firm is a subsidiary of HOCHTIEF. For more information, visit Turner’s website at www.turnerconstruction.com.
HOCHTIEF is one of the leading international providers of construction-related services. With more than 64,000 employees and a sales volume of EUR 18.70 billion in FY 2008, the company is represented in all the world’s major markets. The Group’s service offering in the fields of development, construction, services, concessions and operation covers the entire life cycle of infrastructure projects, real estate and facilities. In the USA, the biggest construction market in the world, HOCHTIEF is the No. 1 general builder via its subsidiary Turner and, with Group company Flatiron, ranks among the most important players in the field of transportation infrastructure construction. With its subsidiary Leighton (HOCHTIEF share around 55 percent), the group is market leader in Australia. Because of its engagement for sustainability, HOCHTIEF has been listed in the Dow Jones Sustainability Indexes since 2006. Further information is available at www.hochtief.com/press.
SOURCE Turner Construction Company