Cranes, construction costs rising fast in Chicago: RLB

0
250
rlb crane index

Chicago has seen a significant increase in construction activity in recent months, as measured by Rider Levett Bucknall’s (RLB) Crane Index and Quarterly Cost Report.

“High-rise work in Chicago has picked up significantly, with the city gaining 3 cranes since the previous survey (for a total of 10), the RLB consultancy said in the report. “Residential remains the strongest sector with luxury rental leading over condos; construction on the largest residential building previously halted due to Covid has now resumed, having switched from condo to rentals,” RLB said in an April 4 statement.

“In the North End, a medical research lab – the first building of a massive mixed-use development – has broken ground.”

Along with the increase in the number of cranes, construction costs in Chicago are also increasing faster than the national average, RLB says. Overall, construction costs in the US have increased on average by 1.58%.

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 lack of warehouse space, RLB reports.

Significant recent events — the Russia-Ukraine war and inflation — are now compounding the current picture. The conflict in eastern Europe is likely to affect 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, 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.”

RLB outlines these observations about the 14 communities covered in the report.

  • 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

Quarterly Cost Report

  • 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.

Editor’s note: Chicago crane numbers have been corrected since the original post.  We regret the original error.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.