Turner Reports 5.49% Annual Increase in U.S. Building Costs

Highlights

• The Turner Building Cost Index reached 1,575 in the third quarter of 2026.
• The index increased 1.48% from the second quarter and 5.49% year over year.
• Data centers, semiconductor facilities, industrial developments and major public projects are supporting construction activity.
• Skilled mechanical and electrical labor shortages and material cost pressures remain key project delivery challenges.

Building Costs Continue to Rise Across the U.S.

Construction owners and developers face continued cost escalation as demand across several major building sectors coincides with labor constraints and pressure on material prices. Turner Construction Co. reported that its Building Cost Index reached 1,575 in the third quarter of 2026, reflecting increases both quarterly and annually.

The index rose 1.48% from the second quarter of 2026 and 5.49% compared with the third quarter of 2025. The measure tracks cost trends in the U.S. nonresidential building construction market.

Turner calculates the index using nationwide factors that include labor rates, workforce productivity, material prices and competitive market conditions. The company has maintained its construction cost forecasting program for more than 80 years.

Data Centers and Industrial Projects Support Demand

Activity in data centers, mission-critical facilities, semiconductor manufacturing, industrial construction and major public and campus projects is contributing to demand across active U.S. markets.

These project categories can require substantial coordination of building systems, equipment and procurement schedules. Turner also identified mechanical and electrical labor availability as a continuing constraint, alongside renewed pressure on material costs and delivery lead times.

For project teams, these conditions increase the importance of evaluating labor availability, material sourcing and procurement schedules during early planning. Delays in securing skilled trades or critical materials can complicate efforts to maintain construction budgets and delivery timelines.

Cost Planning and Procurement Remain Priorities

The third-quarter index provides a national measure of nonresidential building cost trends, but it does not necessarily represent conditions in every regional market. Local labor availability, material pricing, competition and project-specific requirements can produce different cost outcomes.

Turner's index also may differ from other published construction cost measures because its methodology incorporates multiple factors, including productivity and competitive market conditions, rather than relying solely on material prices or labor costs.

For owners, developers and general contractors, the latest increase reinforces the need to account for cost changes when developing budgets and procurement strategies. Early coordination with trade partners and timely purchasing decisions can help project teams manage exposure to pricing changes and extended lead times.

The index does not establish a specific cost increase for any individual project. Its value lies in providing a broader benchmark for evaluating nonresidential construction cost trends and supporting project-level planning.

Source: Turner Construction.