CHICAGO—Overall construction costs Chicago metropolitan area will increase by about 4% during 2015, according to the Mortenson Construction Index. This pace would match what happened over 2014, when overall costs rose by 4%. The index is published by Mortenson Construction Co., a family-owned firm.
Officials from the firm also found that “the construction employment market in Chicago has plateaued at a healthy rate of growth.” Employment in the fourth quarter was 23% ahead of last year's fourth quarter, according to data they cited from the Bureau of Labor Statistics. This continues a pattern seen throughout 2014, and is a big change over 2011, 2012 and 2013, when employment remained flat.
Mortenson has offices in Chicago, Denver, Milwaukee, Minneapolis, Phoenix, Portland, San Antonio and Seattle. The firm analyzes construction costs nationwide and found that the increase in Chicago tracked the overall national numbers very closely. Construction costs in Chicago have risen 12% since January 2009, while national costs have risen 11%.
But during the past quarter, cost increases for Chicago were mostly flat. “All components of the index either increased or remained flat from last quarter,” the firm says. Earthwork costs grew by 4.6% and deck formwork increased by 3.9%. Other components experienced much slighter growth. “The largest components of the overall index, HVAC and Electrical Systems, remained stable at 0% and 0.2% growth respectively.”
“This moderate rate of growth is anticipated to continue in the near term,” Mortenson officials add. “We recommend building owners anticipate cost increases based on a 4% annual rate in 2015.”
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