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The commodities price slump has many construction components getting cheaper—but construction costs are increasing in the US, thanks to labor shortages, according to data from CBRE.
In January 2016, average US construction costs increased 1.8% year-over-year. Over the past five years, the national RSMeans Construction Cost Index has increased an average of 2.3% annually, totaling an 11.8% increase over that time.
"The price of materials is just one driver of overall construction costs,” CBRE Americas head of office research Andrea Cross tells the World Property Journal. “The cost of construction labor tends to be much more variable across geographies and over time, so it typically has a larger impact on overall cost trends.”
Andrea added that a large chunk of construction workers left the sector after the 2008 crisis and never returned.
The number of US construction workers dropped by nearly 985,000, or 15.8%, between 2005 and 2015, according to the Bureau of Labor Statistics. [WPJ]
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