Engineering News Record reports that it's national Building Cost Index (BCI) and Construction Cost Index (CCI) should rise 2.3 percent and 2.1 percent, respectively, next year.
"The optimists are hoping healthy markets will return in 2013, the pessimists are hoping for 2014 or even 2015," ENR's Tim Grogan with Bruce Buckley wrote.
Labor is a majority component of both indices – skilled trades for the CCI, common labor for the BCI – and unemployment is expected to keep those in check. "The lackluster economic and construction market forecasts for 2012 leave little hope that labor wages and benefits will improve much beyond the 1.9 percent annual increase" in 2011, ENR reported.
Labor costs also contribute to uncertainty beyond 2012. ENR reports the Construction Labor Research Council as saying wages have probably bottomed out at historically low growth. Because no one knows what the future holds, however, neither unions nor employers want to sign contracts for more than a year.
In other index components, steel that jumped 18 percent in the first half of 2011 has fallen back to lower levels, and lumber is predicted to fall some more next year before getting back to just below where it was at the end of 2010, ENR said.
