Muir Construction Cost Index

 

 

the 'Muir Construction Cost Index' - Master headline index:

 

 

This is the first official Publication and version v1 of the 'Muir Construction Cost Index' Master headline index.

 

It commences in September of 2019 prior to the 2020 Pandemic to really show a wider picture of how the Pandemic really impacted costs in the construction industry.  This is a better approach as it smooths out the dip in some construction materials in the months of April and May of 2020, after the Pandemic lock down in the United States in March 2020. The months of April and May of 2020 would not have seen much buying activity. The Index is plotted with data on a quarterly basis. It records March and June as the first and second quarters, and so it eliminates the anomalies seen in April and May of 2020.

 

 

 

 

 

The pandemic was a once in a century event. It triggered an unprecedented period of hyperinflation and uncertainty in all industries, and especially throughout the building construction industry. The 'Muir Construction Cost Index' was developed to provide a better tracking system with its patented protected 'Market Reactive Index'.

 

The results of the first official publication of the 'Muir Construction Cost Index's' Master Headline Index cumulative graph translated into yearly cost escalation in the non-residential building construction sector taking June 2020 as the benchmark is as follows:

 

 

i.) Yearly escalation rate as of June 2021: Headline Cost Escalation - 17.27%, Material Escalation - 28.3%. (From the June 2020 Benchmark).

 

ii.) Yearly escalation rate as of June 2022: Headline Cost Escalation - 12.71%, Material Escalation - 20.34%. (Costs kept on rising, but due to time factor the yearly escalation was coming down).

 

iii.) Yearly escalation factor as of June 2023: Headline Cost Escalation - 7.90%, Material Escalation - 12.40%. (From the June 2020 Benchmark).

 

iv.) Yearly escalation factor as of March 2024: Headline Cost Escalation - 6.0%, Material Escalation - 9.30%. (From the June 2020 Benchmark).

 

The 'Muir Construction Cost Index' had the non-residential building construction sector peaking in and around March 2022 with 'Headline' cost escalation from The Pandemic date of June 2020 in the range of 26.62%, and the 'Materials' cost escalation in the range of 41.85%. While escalation on a year over year basis through 2022 and 2023 has remained in a range, the cost index remains elevated. The study above shows the average escalation on a time basis since the pandemic. Due to cost escalation tapering off the yearly numbers over time are coming down. 

 

 

LOOK AHEAD:

 

We are currently reviewing conditions and will provide our Market expectations in the near future.