Construction cost increases in Phoenix come in below national averages

Phoenix has seen a second consecutive quarter with construction cost increases of less than 1%, according to a new report.

BY RON DAVIS/PHOENIX BUSINESS JOURNAL

Jul 15, 2024, 4:25 AM

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expand Taiwanese Semiconductor Manufacturing Co's new plant, as seen from the south. Access to labor remains a premium as the Valley's bigger projects — headlined by TSMC's north Phoenix campus — have demanded hundreds if not thousands of construction workers for the buildout. (Jim Poulin/Phoenix Business Journal)

(Jim Poulin/Phoenix Business Journal)

Phoenix has seen a second consecutive quarter with construction cost increases of less than 1%.

A report from Phoenix-based Rider Levett Bucknall, a construction advisory, cost and project management firm, found Phoenix came in below national averages for cost increases, experiencing a 0.94% spike from the first quarter. The national average increase in construction costs was 1.12% over the previous quarter.

“The construction industry continues to experience strong demand, but uncertainty is being fueled by high interest rates and increasing labor costs for the rest of 2024. The approaching presidential election and potential policy adjustments are also contributing to this uncertainty,” says Paul Brussow, president of RLB North America in a statement. “Nevertheless, overall growth in the construction sector is expected to remain positive this year.”

Brussow was named the new president of RLB North America in December 2023 and started in January 2024.

Phoenix has experienced an annual increase of 4.17%, the third-lowest of 12 markets in the United States spotlighted by RLB. The near 4% increases hover around what was expected in the Phoenix market from near the midpoint of 2023. Chicago had the largest cost increases in the U.S., experiencing a 7.67% annual spike. Toronto topped the list of all markets spotlighted with a 7.94% increase.

This story is posted in partnership with Phoenix Business Journal. Click to read the full story.