By BEX Staff for AZBEX
Mortenson has released its Q2 Construction Cost Index, and costs in Phoenix are up slightly more than the national average.
Single-quarter nonresidential costs in Phoenix rose 1.42%, according to the report. The national average was 1.28%.
Mortenson’s national data, “shows a continued flattening of material costs, suggesting pandemic, supply-chain, and inflation-related increases experienced over the last two years have largely abated. The overall pace of labor cost increases slowed in the second quarter to 3.2% relative to the 12-month trailing average, and at +1.3% and +0.7%, respectively, the costs of subcontract work and materials are providing stability to project costs.”
The report also includes data on items contributing to construction costs and the overall Phoenix construction market. Major points include:
- Phoenix building construction employment is up 5% over June 2022, for a total of 34,300 jobs;
- Construction starts are up 9% from the 12 months ending in May 2022;
- Commodity prices are leveling off, and
- Lead times and materials shortage issues are stabilizing.
In concluding its Phoenix market review, Mortenson said, “…We remain cautiously optimistic as demand for construction remains strong even with labor costs continuing to impact project budgets.”