Construction Expenses Rise in Phoenix 2015
Published By : 09 Feb 2015 | Published By : QYRESEARCH
Mortenson had release their quarterly Construction Cost Index on February 5. The report for Phoenix and five other metropolitan areas in the U.S., said that multiple construction costs are expected to rise for the greater Phoenix area. There will be a 3 per cent increase in non-construction labor, equipment costs, and material costs in 2015.
Although the costs of construction materials fell in the latest quarter and there was a 6 per cent fall in local and non-residential employment in 2014, Phoenix is still expected to witness shortages in labor due to the data from the Bureau of Labor Statistics.
Phoenix is also set to have shortages in labor due to relatively healthier construction activities in California, Colorado, and Utah.
The area recorded a flat rate of growth in 2014 and a two point fall in the index of the fourth quarter in 2014 put Phoenix below the national average. This is the first time the local index has dropped below the national index since early 2011.
Mortenson’s chief estimator Ty Bohlender said that he was more concerned about the upswing in costs in the surrounding states. Arizona labor will continue to be drawn towards Colorado, California, and Utah. There will be, at some point, a gross depletion of local laborers while Arizona work actually picks up. This will coincide with the national trend for increasing material price, which is not linked to local market conditions.
The current costs of materials required for building as well as electrical systems’ components in Phoenix had witnessed a slump. The other categories have witnesses either flat or have experienced a minor decline.