Accompanying this report are tables based on RSMeans’ measures of dollar-per-square-foot construction costs.
This month, results are show for an auditorium, gymnasium, fire station and library in 25 major cities.
Ranking by expense
Most expensive to build – on a dollar-per-square-footage basis – is an auditorium.
A step down of about 10% yields the next costliest structure, a fire station.
It’s a further relatively minor drop to the two cheapest types of structure to construct among the four categories, a library and a gymnasium.
A library and a gymnasium bear almost identical costs on a square-footage basis.
Comparisons with other types of structure
According to RSMeans, the cheapest types of structure to build, after extremely low-cost parking garages, are factories and warehouses.
A convenience store also belongs in this low-expense grouping.
Department stores and movie theatres are a little pricier.
In the mid-range for construction costs are nursing homes, office buildings, hotels and high-rise apartment buildings. In the latter three categories, heights above ten stories tend to lower the dollar-per-square-footage cost.
Also in the mid-range for construction costs are elementary and secondary schools, along with institutions of higher learning.
The categories featured in this report - auditoriums, gymnasiums, fire stations and libraries - also belong in the mid-range for construction costs.
By far the most expensive types of structure to build are hospitals, jails/prisons, courthouses and police stations.
Some of the foregoing institutional building categories exceed $350 per square foot in the largest urban centers.
In New York, for example, the cost of a low-rise hospital exceeds $400 per square foot and eases back only a little to $370 for a medical facility with a greater story height.
New York is the most expensive; cities in the South are least expensive
New York has the highest dollar-per-square-foot construction costs in the country.
San Francisco, Boston, Chicago and Philadelphia hold the other four positions in the Top Five among major U.S. urban centers.
Relatively low-cost cities are mainly in the southeast and south-central. Included are Miami, Atlanta, Phoenix, New Orleans, Houston, Dallas and Winston-Salem.
Kansas City, San Diego, Detroit, St. Louis, Pittsburgh, Portland and Cleveland are situated in the middle among the 25 cities set out in the tables.
Washington, Denver and Baltimore are in the low mid-range.
Minneapolis is the nation’s sixth most expensive construction-cost city. Los Angeles and Seattle on the West-Coast are in the upper mid-range.
Along the Pacific shoreline, dollar-per-square foot construction costs in Los Angeles, Seattle and San Diego are between 12% and 16% lower than in high-cost San Francisco.
Portland is nearly one-fifth (-18%) less expensive than the City by the Bay for building projects.
Some other city comparisons
In some other city comparisons, it costs 32% more to build in Chicago than in Atlanta and there is a 27% differential between higher-cost Philadelphia and lower-cost Miami.
The mark-up in New York, the most expensive city among the 25 shown, and Winston-Salem N.C., the least expensive, is nearly three-quarters (+73%).
Year over year construction costs
In its latest survey, RSMeans altered the design specifications for its auditorium, gymnasium and library models.
Therefore, it’s not valid to compare prices on a year-over-year basis for those three categories. The percentage change would be affected by more than just cost trends.
In the one remaining building type, a fire station, the year-over-year average percentage change for the 25 cities was +2.6%.
By way of comparison, the current rate of inflation in the United States is +3.0%. That was December’s year-over-year increase in the all-items Consumer Price Index (CPI).
The two figures (+2.6% for construction and +3.0% for the CPI) matched up pretty closely.
From highest to lowest, Baltimore, Kansas City and Chicago ranked numbers one through three for year-over-year cost increases among the 25 cities in the latest month.
Atlanta, New Orleans, Portland, Philadelphia, Miami, Detroit and Denver formed the next rung on the ranking ladder.
Cities with the lowest rates of construction cost increases were San Diego, New York, San Francisco, Cleveland, Minneapolis and Phoenix.
The outlook for construction material costs
Early in 2012, construction material costs are restrained but more open to wavering.
The European debt crisis and all it may mean for credit markets continues to cast a cloud over world growth prospects.
A weaker Europe means fewer export sales by China. In fact, that nation had its lowest GDP growth rate (+8.9%) in many quarters in Q4 2011.
It seems inappropriate to call +8.9% disappointing, but until recently a double-digit GDP growth rate in China was taken for granted.
As a result, prices for many commodities have pulled back from their recent highs.
The one exception has been the world price of oil, which remains elevated due to tensions in the Middle East.
Raw resources are, by definition, the ingredients that go into building products. Hence, material costs are being held back.
At the same time, the data on the U.S. economy is picking up faster than many were anticipating.
Month-to-month employment, initial jobless claims, consumer confidence and retail sales have all recorded marked improvement.
Most significant for the construction industry, the housing market appears to have stabilized at the bottom and may even be showing signs of a timid revival.
As for non-residential construction, the dollar volume of starts in 2011 was +11% compared with 2010, according to Reed Construction Data.
The break-down was non-residential buildings at +14% and heavy engineering at +6%.
2012 is likely to be a year of gradually increasing construction costs, more so on the materials side than labor.
|2011||2010||% Change||2011||2010||% Change|
|15||NEW YORK CITY||242.30||220.93||n/a||216.36||212.74||1.7%|
|2011||2010||% Change||2011||2010||% Change|
|15||NEW YORK CITY||207.65||198.91||n/a||208.12||198.78||n/a|