The quarterly index is a gauge that has been used for more than50 years by the construction industry and Federal and stategovernments to keep tabs on building costs and price trends. TheCost Index takes into consideration labor rates and productivity,material prices and competitive conditions. "Theoretically, thingscost six times as much now as they did in 1967," says Karl F.Almstead, Turner Construction Co. vice president of estimating andpreconstruction services who has calculated the quarterly reportssince 1997.

The Dallas-based Turner Corp. says third-quarter costs rose 1.2%from this year's second quarter and are 4.54% higher than thirdquarter 1999. The Cost Index for the third quarter will rise to599, seven points above the second-quarter recording.

Metropolitan cities in Texas are not nearly as strapped as somein the northeast, particularly New York City, Almstead, who officesin New York City, told GlobeSt.com. At the crux of the nationwideescalation are rising energy prices and overwhelming commercialdemands, in particular from telecommunications companies pushingfor high-tech carrier hotels. Meanwhile, building continues atrecord levels in some regions. The key for contractors is to allowplenty of lead time for material deliveries, emphasizes Almstead.Any delays, he says, "all depend on how good the people are who aredoing the project."