Rider Levett Bucknall Report: New Challenges Impacting the Construction Industry

Even as many downtown projects are completed, Denver has experienced a significant increase in its crane count. Graphic: RLB

International property and construction consultancy firm Rider Levett Bucknall (RLB) has released its latest Crane Index and Quarterly Cost Report. Together, the two documents provide an on-the-ground picture of construction activity in 14 key North American markets and data-driven insights into the industry.

While the surge of the COVID-19 Omicron variant is subsiding, pandemic-induced problems remain. Supply chain issues continue to plague all levels of the construction industry, from raw materials to finished products, as pent-up demand for building supplies grows. A spike in fuel prices and a shortage of truck drivers are still slowing overland transit of goods, a condition exacerbated by a lack of warehouse space.

Significant recent events — the Russia-Ukraine war and inflation — are now compounding the current picture. The conflict in eastern Europe is likely to affect the costs and availability of some key materials; Russia is a major producer of copper and aluminum. Inflation is on the rise, pushing prices across the board higher.

“It’s a complicated situation,” said Julian Anderson, FRICS, president of RLB North America. “While the bipartisan passage of the $110 billion Infrastructure Investment and Jobs Act is a major step forward, it remains to be seen how inflation will affect its implementation.”

Crane Index notes:

  • Cities seeing an increase in cranes include Chicago, Denver, New York, San Francisco, and Toronto
  • Cities holding steady in their crane counts include Honolulu, Las Vegas, Los Angeles, and Phoenix
  • Cities with a decrease in cranes include Boston, Calgary, Portland, Seattle, and Washington, D.C.
  • The top three sectors for cranes are residential, mixed-use, and commercial

Even as many downtown projects are completed, Denver has experienced a significant increase in its crane count.
This is due to the continuing redevelopment of the Five-Points/Cole/RiNo areas, as developers capitalize on what seems to be a never-ending demand for apartments. Many include a component of mixed-use amenities such as grocery stores, entertainment venues, office space, and parking. Downtown, there are several new office developments on the drawing board.

Quarterly Cost Report notes:

  • The U.S. quarterly national average increase in construction cost is approximately 1.58%, compared to 8.04% year-over-year
  • The U.S. Gross Domestic Product (GDP) is 7.0%
  • The Architectural Billings Index (ABI) was unchanged from the previous month’s 51.0

Read the complete QCR report here and the Crane Index here.                                                 

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