The quarterly index is a gauge that has been used for more than 50 years by the construction industry and Federal and state governments to keep tabs on building costs and price trends. The Cost Index takes into consideration labor rates and productivity, material prices and competitive conditions. "Theoretically, things cost six times as much now as they did in 1967," says Karl F. Almstead, Turner Construction Co. vice president of estimating and preconstruction services who has calculated the quarterly reports since 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 third quarter 1999. The Cost Index for the third quarter will rise to 599, seven points above the second-quarter recording.
Metropolitan cities in Texas are not nearly as strapped as some in the northeast, particularly New York City, Almstead, who offices in New York City, told GlobeSt.com. At the crux of the nationwide escalation are rising energy prices and overwhelming commercial demands, in particular from telecommunications companies pushing for high-tech carrier hotels. Meanwhile, building continues at record levels in some regions. The key for contractors is to allow plenty of lead time for material deliveries, emphasizes Almstead. Any delays, he says, "all depend on how good the people are who are doing the project."
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