Basu in a release about the indicator .
“ ABC ’ s survey data indicate that we are in the early stages of a nonresidential construction spending downturn ,” he said . “ With few exceptions , declines in backlog have begun to accelerate across all markets and regions .”
Falling construction costs . A variety of pandemic-related forces have caused construction costs to decline slightly for the first time in a decade , which could lead contractors to feel a pinch in profits .
The Turner Building Cost Index , which measures costs in the U . S . nonresidential building construction market , fell to a value of 1171 in the third quarter of 2020 , a 1.5 % quarterly reduction from the beginning of the year . This year marked the first time the index from Turner Construction has reduced in value since 2010 .
“ Trade contractor competition has increased in many areas as they work to secure backlog due to uncertainty they have about future opportunities ,” said Attilio Rivetti , the Turner vice president responsible for compiling the Cost Index in a press statement .
Less work . Various sectors of commercial construction will continue to experience a decline even after the rest of the economy begins to recover from COVID-19 , economists say . For instance , experts predict people will continue to work from home more often then they go into a central office , so construction of office buildings remains a gray area in terms of future growth .
The construction of new healthcare facilities also could drop significantly because of changes in lifestyles post- COVID-19 , according to Ken Simonson , chief economist for the Associated General Contractors of America .
“ Hospital use dropped off drastically in the spring and it ’ s not certain if visits for elective surgery and other non-essential procedures will come back ,” Simonson said . “ Or will we see growth of alternative medical care through urgent care or surgery centers ?”
He also questioned if nursing home construction would fall because people might be more hesitant to check themselves or family members into the facilities .
Travel and hospitality sectors , along with sports or performance venues , also look grim according to Simonson . That ’ s primarily because their revenue sources — sales taxes , convention income and tolls — are taking a big hit and aren ’ t expected to get replenished anytime soon as the pandemic begins a third wave of intensity .
Price increases .
This year has seen fluctuations in the prices of construction materials , most recently with the skyrocketing cost of lumber . Prices have been rising on most materials since May , according to ABC .
Its September look at prices found that among 11 subcategories , eight experienced monthly increases . As construction comes back online around the world , increasing demand for products could keep prices on the rise , Basu said .
12 DITCHMEN • OCTOBER 2020