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Phoenix outpaces national average for construction cost increases

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Posted at 8:59 AM, Jan 25, 2022
and last updated 2022-01-25 10:59:33-05

The cost of construction in Phoenix is outpacing the average for large cities, but so far it has not been cited as the cause for new project delays.

“Phoenix is facing two main issues,” Jesse Zunke, associate with Rider Levett Bucknall in Phoenix, said. “One is that supply chain pressures are still creating issues, and the other is there has been an influx of work at a large scale.”

An influx of major projects, which include Taiwan Semiconductor Manufacturing Co.’s $12 billion facility in north Phoenix, Intel’s $20 billion expansion in Chandler and civil projects that will come as a result of the Infrastructure Investment and Jobs Act, will all have an effect on the demand for materials and labor for the construction industry.

“Intel and TSMC are significant projects for any market to absorb,” Zunke said.

According to the RLB quarterly construction cost index for the 12-month period that ended October 1, 2021, Phoenix had an annual change of 8.12% in the comparative cost index, which tracks the “true” bid cost of construction in 14 metros. The average increase for the 14 metros studied, 12 in the U.S. and two in Canada, was 7.42%.

Read more of this story from the Business Journal.