Local construction labor, material and equipment costs in the Milwaukee area have increased 5.8 percent year-over-year compared to 3.9 percent growth nationally, according to Mortenson Construction’s quarterly Construction Cost Index report, released today.
The firm said it believes that based on local increases to date, and the consistent increase in national construction costs, growth in Milwaukee construction pricing will continue through 2014. The company is providing guidance that indicates the Milwaukee area could see a 5.0 percent increase in construction costs over the next year as the economic and construction industry recovery continues. This increase represents one of the highest among the six metropolitan areas that Mortenson tracks including Minneapolis, Milwaukee, Chicago, Denver, Phoenix, and Seattle.
“Construction costs in the Milwaukee market are rising at a greater pace than what we are seeing nationally with the local index exceeding the national average this quarter for the first time since the first quarter of 2009,” said Doug Heinrich, chief estimator, Mortenson Construction. “There is a lot of activity in the market at the moment and it is fueling growth on a number of levels. It is too early to say how the trends we are seeing here will change as we get into 2015.”
The report also cites a slight growth in local construction employment in the first half of 2014 according to data from the Bureau of Labor Statistics.
“The good news is that this reflects a current and future growth in employment within the construction market sector, something we have not seen consistency since 2009,” said Alicia Dupies, director of project development for Mortenson Construction.
The Mortenson Construction Cost Index is calculated quarterly by pricing representative non-residential construction projects in various metropolitan areas throughout the country. It is part of a portfolio of industry insights and market studies provided by Mortenson. The Construction Cost Index is available by clicking here.