Our state is notorious for its high construction costs; however, Pacific Business News has recently reported the rate at which these costs increase has recently slowed down. Read more below:
Construction costs in Honolulu were the second-highest in the nation during the first quarter, but Hawaii’s largest city had the smallest annual increase in costs among 12 cities monitored by Rider Levett Bucknall for its first quarter construction cost report.
Honolulu is second only to New York in the company’s comparative cost index — a year ago, the two cities were in reverse. But while New York experienced a 3.88 percent increase in costs between January 2016 and January of this year, Honolulu saw an increase of less than 0.74 percent, the lowest increase among the 12 cities tracked in the report.
Rider Levett Bucknall uses current, market-specific pricing for labor and materials, as well as overhead costs and local fees to compile the quarterly report, which found that nationally, costs increased by an average of 5.1 percent. San Francisco had the highest increase in costs from last year, a 14.4 percent increase in the index, followed by Los Angeles at 8.4 percent.
The report also placed Honolulu at the top of the bell curve for the construction activity cycle, well ahead of the other cities but not yet headed for a downturn.
The report said that nationally, construction-put-in-place in January was estimated at a seasonally adjusted annual rate of $1.18 trillion, which was 1 percent below the December estimate.