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.