Design, Construction & Compliance

Building Cost Projections

COST PROJECTIONS BEGINNING FY22

Building Cost Projections FY22

The Past Year

NATIONALLY

2020 started out strong with new construction starts increasing.  The spread of COVID-19 in March drastically effected construction as most construction sites closed down for several weeks.  By May, most construction project were back in production, but new construction starts reduced.  The  longer COVID-19 restrictions in place, the worse the projections for new work.  Material costs and availability are severely impacting the construction industry.

Wildfires also are impacting the availability and cost of primarily wood products.  If available, costs for lumber, plywood and wood related materials will be extremely high.

In September Multi-Family Design and Construction reported “It’s been a wild ride in 2020 for the U.S. timber industry, and the run up in prices shows no sign of easing. First, mills temporarily shut down in March due to the COVID-19 pandemic. Then, in September in the timber nexus of the Northwest, wildfires have burned out of control threatening some timber plants.”

In May, Architectural firms were reporting business conditions at remained extremely poor. Their outlook for new work was low. 

The building design and construction industry organizations do not agree on when “business will return to normal”.

Attilio Rivetti, Vice President  for Turner Construction stated “The vast majority of construction projects were deemed essential business operations during the COVID-19 pandemic. Many of the projects that were paused or slowed earlier this year have ramped up and are back on track. We are witnessing minor increases for fabricated commercial building materials, which is being offset as we continue to see subcontractor competitiveness increasing in efforts to secure backlog for their business.”

(Above data compiled from AGC and Turner Construction Company)

LOCALLY

While Kansas had some construction slow down, agencies took the opportunity to continue with construction projects that were enhanced by employees working from home, leaving buildings and parking lots empty.  Future construction projects remain in limbo due to a reduction in state revenues. 

The Forecast for FY22

COVID-19 has left a lot of questions unanswerable.  State agencies are proceeding with caution.

Cost Projections

 Yearly Cost Projections
from FY22
Monthly Cost Projections
from FY2021
FY22 5.0% 0.00417 / month (5% / 12 months).
FY23 9.0% 0.00375 / month (9% / 24 months)
FY24 12.0% 0.00333 / month (12% / 36 months)
FY25 17% 0.00354 / month (14% / 48 months)
FY26 21.0% 0.00350 / month (17% / 60 months)

These projections were compiled from multiple sources including AGC of America, US Bureau of Labor Statistics and Engineering News Record

Historical Cost Indexes

Year beginning in January Average Index % change Year beginning in January Average Index % change
2020 (3rd quarter) 1171 -0.51 2009 832 -8.40
2019 1156 5.5 2008 908 6.30
2018 1096 5.60 2007 854 7.70
2017 1038 5.00 2006 793 10.60
2016 989 4.70 2005 717 9.50
2015 943 4.50 2004 655 5.40
2014 902 4.40 2003 621 0.30
2013 864 4.10 2002 619 1.00
2012 830 2.10 2001 61 3.00
2011 812 1.60 2000 595 4.40
2010 799 -4.00 1999 570 3.80

(The above historical cost data was obtained at www.turnerconstruction.com/cost-index.)