Construction-put-in-place during July 2020 was estimated at $1,346.6 billion, which was 0.1% below the revised estimate from July 2019, according to Rider Levett Bucknall’s (RLB) Third Quarter 2020 Construction Cost Report. Here's some other key points from the report:
- Construction costs increased in 11 of 12 major metro areas year over year in the United States, dropping 1.32% in Chicago, but increasing in all other markets.
- The largest increases were in Los Angeles (up 4.90%) and New York (up 4.62%).
- RLB reported that, based on its research, between April and July of 2020, the national average increase in construction cost was approximately 0.16%.
- The U.S. gross domestic product reported the largest quarterly drop on record, with the second quarter decreasing 32.9%.
- The consumer price index has continued its slight increase from 2019—256.1 in Q2 2019 to 257.8 in Q2 2020.
- ENR's Construction Industry Confidence Index clocked its lowest rating since Q3 2010—36. The index was down 20 points from the previous quarter and 22 points from the same time in 2019.
RLB North American President Julian Anderson said the abrupt slowing of activity caused by the coronavirus pandemic makes it difficult to chart the economy's recovery as well.
"Should a second wave of the pandemic occur in the fall and winter (as some health experts fear), and lock-downs resume, a W-shape recovery could be on the cards. The U.S. experienced this kind of double-dip recession in the early 1980s," Anderson said. After weathering an oil crisis and elevated inflation in 1979, the economy fell into a brief recession in 1980, then rapidly started growing again."
If another spike in cases occur, Anderson noted the country will be slower to recover depending on the severity of the spike.
"... As a result, we won’t exit the trough of the U quickly. A variation on the U is the swoosh. In this model, the economy takes a sharp downturn, then gradually improves as lockdowns are eased more gradually than they were imposed. The recovery period is longer than that of the V-shape yet faster than the U-shape. This response is exacerbated by emerging uncertainties, such as consumers opting to save rather than spend or if businesses curb investing in urban areas," Anderson said.