It’s getting more expensive to build in Denver as labor, fuel, material and operating costs continue to rise.

Local construction costs increased nearly 4.6% year-over-year and about 1.3% in the third quarter, according to a construction cost report from Rider Levett Bucknall. 

Nationally, cost inflation grew about 4.5% year-over-year and 1.3% over the quarter, according to RLB’s Q3 report.

“The North American construction industry is splitting into two distinct directions as it navigates the third quarter of 2026,” the report reads. “While residential activity and upstream architectural design pipelines continue to slow, non-residential construction remains exceptionally vigorous, propelled by an unprecedented wave of capital-intensive megaprojects across digital infrastructure and advanced manufacturing.”

Nonresidential construction costs in Denver grew nearly 1.4% in the second quarter and 6.8% over the past 12 months, according to Mortenson’s Q3 construction cost index.

“Denver recorded moderate cost movement this quarter, with increases concentrated in select concrete and steel scopes,” Mortenson’s report reads. “Site concrete and reinforcing steel saw the strongest gains, while several finish trades declined or remained flat. These results reflect uneven pricing across trades, with project-specific demand continuing to influence bidding and procurement activity.”

Nationally, prices of construction-related materials jumped 13.3% year-over-year, nearly five times last year’s rate, according to a Cushman & Wakefield construction insights report released in September. Material costs are replacing labor as the main driver of construction cost growth, according to Cushman.

Increasing costs have led developers across the country to scrap commercial projects. Locally, developers have canceled plans over the past few years for the 70K SF Camp Pickle in Centennial, a four-story condo building at 325 and 329 Detroit St. in Cherry Creek and a 37-story residential building at Larimer Street and Speer Boulevard.

Earlier this year, Arvada canceled a planned underpass along a portion of the West 72nd Avenue widening project after the total project cost came in at $137M, more than double the bond amount of $64.5M, according to the city.