The Seattle market’s construction costs continued growing in Q1 2017, with costs once again outpacing the national average, according to a new report by Mortenson Construction. Construction costs for nonresidential construction labor, material and equipment in Seattle were 3.8% higher during Q1 than during the same period in 2016.

At the same time, Seattle-area construction employment remains fairly strong, despite slowing down relative to Q4 2016.

“Much has been said about Seattle’s building frenzy, and component costs and strong employment trends indicate a healthy flow of construction activity in the market,” Mortenson chief estimator Mark Wagner said. “Though employment growth has slowed down slightly, it still remains robust, suggesting wage growth in the coming year.”

Building materials and components in Seattle that experienced the highest cost increases year-over-year included steel framing, gypsum board systems and roofing systems. All other categories experienced slight growth or remained flat.

All together, Mortenson recommends building owners anticipate continued moderate cost increases between 3.5% and 4% during the next 12 months.