By BEX Staff for AZBEX
Construction costs in Phoenix continued to increase in Q3 but did so at a rate below the national average, according to a newly released report from Rider Levett Bucknall. Meanwhile, the number of cranes at work in the region has remained largely unchanged.
RLB reports, “The national average increase in construction costs was 1.55% over the previous quarter, with Chicago, Honolulu, Las Vegas, New York, Portland and Seattle all experiencing increases over the national average this quarter. Boston, Denver, Los Angeles, Phoenix, San Francisco, and Washington, D.C. experienced gains that were less than the national average.”
The year-over-year increase came in at 6.49%.
Phoenix’s annualized rate of change for construction costs was 6.52% as of July, placing it fourth among the 12 cities tracked. Seattle had the largest gain at 9.19%, while Honolulu showed the smallest with 4.77%
Phoenix’s Cost Index has shown declining rates of increase since July 2022, when it rose by 2.31%. The quarterly index for July 2023 was up 1.3%.
Crane Count Steady
RLB’s biannual crane count shows the overall national count of tower cranes at work in the 14 North American cities tracked has decreased by 10%. Six of the 14 cities saw decreases which RLB called “significant,” with decreases of more than 20%. Two cities—Boston and Toronto—saw increases while the remaining six, including Phoenix, held mostly steady.
In summarizing Phoenix crane activity, the report said, “While the total number of cranes has decreased slightly overall this year, with several major projects being completed, several new projects have also started. Two major projects in the healthcare sector were completed, but six new cranes have now been erected since the previous count. Notably, two of those new projects are residential high-rise.”
Across North America, residential projects continue to see the most significant growth. Residential and mixed-use make up a reported 72% of the total count. RLB predicts crane numbers will remain mostly steady for the rest of the calendar year.
In summarizing construction costs and activity, RLB leadership lauded the industry’s adaptability. “The current economic situation has many feelings like they are playing a chess match with no endgame,” President of RLB North America Julian Anderson said in announcing the report. “Despite these challenges, the construction industry has been remarkably resilient. The pieces on the economic board may still be shifting, but we are continuing to make well-considered moves and are positioning us for a stronger, more secure financial future.”