International property and construction consultancy firm Rider Levett Bucknall (RLB) has released its latest Crane Index and Quarterly Cost Report (QCR). Together, the two documents provide an eye-opening perspective on the North American construction industry in 14 key markets. In Phoenix, the number of cranes has dipped to the level of February 2020, as several buildings have wrapped construction. Luxury residential projects, including Aspire Fillmore, The Rey, and The Fillmore, account for several cranes, and there is crane activity at mixed-use sites in Midtown.
The latest quarterly cost report data show that despite the slow-down in construction, the combined effects of material price increases with challenges in maintaining the supply chain have sent costs escalating back to the familiar range of 1% per quarter (4% annualized).
In the last 12 months, construction materials prices have increased strikingly. The price of copper has almost doubled, from a low of $2.11/lb. to $4.01/lb.; aluminum has risen from $0.73/lb. in April 2020 to around $1.05/lb. in March 2021; and lumber skyrocketed to nearly $1,000/MBF in March 2021.
“Looking ahead, my expectation is that construction price pressure will increase as the year goes on due to the stimulating effects (on the construction industry) of at least the ebbing of the COVID-19 pandemic and the stimulus provided by the American Rescue Plan Act,” said Julian Anderson, FRICS, President of RLB North America. “If the Biden administration is successful in pushing through an infrastructure plan, then that should keep the momentum going for a few more years.”
Crane Index notes
• Cities seeing an increase in cranes include Boston, Calgary, Denver, Honolulu, Los Angeles, Toronto, and Washington D.C.
• Cities holding steady in their crane counts include Chicago, New York City, Portland, and Seattle
• Cities with a decrease in cranes include Las Vegas, Phoenix, and San Francisco
• Toronto continues to be home to the majority of total cranes counted (43%), followed by Los Angeles (9%), Seattle (9%), and Washington D.C. (9%)
Quarterly Cost Report notes
• The U.S. quarterly national average increase in construction cost is approximately 0.99%, compared to 1.82% year-over-year
• The U.S. Gross Domestic Product (GDP) growth has rebounded to 4.1 during the fourth quarter of 2020
• The Architectural Billings Index (ABI) dropped to 42.6 from the previous quarter’s 47.0