construction cost trends central texas conference – november 13, 2009

CONSTRUCTION COST TRENDSCentral Texas Conference – November 13, 2009

Construction Cost Trends

1. The Last 18 Months2. Current Economic Factors3. Stimulus Efforts/Effect4. CEFPI Project Cost Tracking5. What Lies Ahead

1. The Last 18 Months

Producer price index (PPI) for construction vs. consumer price index, 2003-09

PPI for inputs to construction industries: 33%

Consumer price index: 17%

Source: BLS (CPI, PPI) and The Associated General Contractors of America

1. The Last 18 Months

Source: Gerdau Ameristeel

1. The Last 18 Months

Tail end of an overheated market Soaring demand and pricing Collapse of the housing market Financial market implosion Government Intervention Dust begins to settle Chasing the market

1. The Last 18 Months

$

Time

Historical Inflation %

Budgets

Cost

Chasing the Market

1. The Last 18 Months

$/SF

PPI for inputs to construction industries: 33%

Elementary School Case Study

Consumer price index: 17%

2. Current Economic Factors

Foreign demand Petroleum price Texas employment School enrollments Single family housing market Commercial construction market Availability of financing P&P bonding availability Political environment

3. Stimulus Efforts/Effect

Federal program Status of funds Results

3. Stimulus Efforts/Effect

Economic stimulus packageTotal : $787 billion in spending increases, tax

cuts $308 billion in appropriated spending $267 billion in direct spending (refundable

portion of tax credits, unemployment benefits, Medicaid reimbursement to states, etc.)

$212 billion in tax cuts

Source: The Associated General Contractors of America

3. Stimulus Efforts/Effect

Local Project Costs and Inflation History As maintained by the local CEFPI organization

4. CEFPI Project Cost Tracking

4. CEFPI Project Cost Tracking

General Informationo District Nameo Grade Levelo Bldg Square Footageo Student Capacityo Square Footage per

Studento Bid Dateo Completion Dateo Project Delivery Method

Cost Informationo Site work/Site Athletics o Building Cost

Other Costso Offsite

Roads/Utilities/Lando Design & Testing

Differentiating Featureso Site conditions , etc.

Project Information Sheet contains Basic Information

o Furniture

o Movable Equipmento Library Shelvingo Computerso Security Systemso Telephone Systemso Playground Equipment

o P.A. Systemo Computer Softwareo Textbookso Projector Screenso Landscapingo Televisionso Computer Hardwareo Library Books

Items Budgeted/ Furnished Separately by the Owner

4. CEFPI Project Cost Tracking

Project Information Sheet contains Basic Information

4. CEFPI Project Cost Tracking

Sample of Project Information Sheet

4. CEFPI Project Cost Tracking

                      Inflation History

Revised 10/27/2009 Capacity

Grade Level

Square Footage

Construction Costs

Cost / SF

Cost / Student

SF / Student

  Bid Date or Final GMP Approval Date

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

    0.03 0.01 0.005 0.02 0.005 0.015 0.05 0.1 0.07 0.06 0.05 0.12 0.01 0.06 0.06 0.06 0.06 0.06 0.06

                                        projected projected projected projected projected projected projected

RRISD Blackland Prairie Elem. 800 PK - 5 94535 $ 10,617,030

$ 112.31

$ 13,271

118.17  Apr-00 $ 10,617,030

$ 10,670,115

$ 10,830,167

$ 11,371,675

$ 12,508,843

$ 13,384,462

$ 14,187,529

$ 14,896,906

$ 16,684,535

$ 16,851,380

$ 17,862,463

$ 18,934,211

$ 20,070,263

$ 21,274,479

$ 22,550,948

$ 23,904,005

    $ 112.31

$ 113

114.56

120.29

132.32

141.58

150.08

157.58

176.49

178.26

188.95

200.29

212.31

225.04

238.55

252.86

RRISD Cactus Ranch Elem. 800 PK - 5 94535 $ 11,214,619

$ 118.63

$ 14,018

118.17  Aug-00 $ 11,214,619

$ 11,270,692

$ 11,439,752

$ 12,011,740

$ 13,212,914

$ 14,137,818

$ 14,986,087

$ 15,735,392

$ 17,623,639

$ 17,799,875

$ 18,867,867

$ 19,999,939

$ 21,199,936

$ 22,471,932

$ 23,820,248

$ 25,249,463

    $ 118.63

$ 119

121.01

127.06

139.77

149.55

158.52

166.45

186.42

188.29

199.59

211.56

224.25

237.71

251.97

267.09

RRISD Union Hill Elem. 900 PK - 5 106764 $ 14,120,000

$ 132.25

$ 15,689

118.63  Jun-01 $ 14,120,000

$ 14,331,800

$ 15,048,390

$ 16,553,229

$ 17,711,955

$ 18,774,672

$ 19,713,406

$ 22,079,015

$ 22,299,805

$ 23,637,793

$ 25,056,061

$ 26,559,424

$ 28,152,990

$ 29,842,169

$ 31,632,699

    $ 132.25

134.24

140.95

155.05

165.90

175.85

184.64

206.80

208.87

221.40

234.69

248.77

263.69

279.52

296.29

HCISD New Elementary (Negley ES)

880 1 - 5 92222 $ 10,514,000

$ 114.01

$ 11,948

104.80  Feb-05 $ 10,514,000

$ 11,144,840

$ 11,702,082

$ 13,106,332

$ 13,237,395

$ 14,031,639

$ 14,873,537

$ 15,765,949

$ 16,711,906

$ 17,714,621

$ 18,777,498

    114.01

120.85

126.89

142.12

143.54

152.15

161.28

170.96

181.21

192.09

203.61

HCISD New Elementary (Science Hall)

800 1 - 5 86884 $ 10,443,649

$ 120.20

$ 13,055

108.61  Mar-05 $ 10,443,649

$ 11,070,268

$ 11,623,781

$ 13,018,635

$ 13,148,821

$ 13,937,751

$ 14,774,016

$ 15,660,457

$ 16,600,084

$ 17,596,089

$ 18,651,855

    120.20

127.41

133.79

149.84

151.34

160.42

170.04

180.25

191.06

202.52

214.68

LISD New Elementary No. 16 877 PK - 5 100472 $ 13,477,555

$ 134.14

$ 15,368

114.56  May-05 13,477,555

$ 14,286,208

15,000,519

16,800,581

16,968,587

17,986,702

19,065,904

20,209,858

21,422,450

22,707,797

24,070,265

    134.14

142.19

149.30

167.22

168.89

179.02

189.76

201.15

213.22

226.01

239.57

LISD New Elementary No. 17 877 PK - 5 100472 $ 14,019,581

$ 139.54

$ 15,986

114.56  May-05 14,019,581

$ 14,860,756

15,603,794

17,476,249

17,651,011

18,710,072

19,832,676

21,022,637

22,283,995

23,621,035

25,038,297

    139.54

147.91

155.30

173.94

175.68

186.22

197.40

209.24

221.79

235.10

249.21

SMISD New Elementary (Bowie) 700 K-5 80888 $ 10,026,911

$ 123.96

$ 14,324

115.55  May-05 10,026,911

10,628,526

11,159,952

12,499,146

12,624,138

13,381,586

14,184,481

15,035,550

15,937,683

16,893,944

17,907,581

    123.96

131.40

137.97

154.52

156.07

165.43

175.36

185.88

197.03

208.86

221.39

Project Information SpreadsheetOverall

Revised 10/27/2009 Capacity Grade Level

Square Footage

Construction Costs

Cost / SF Cost / Student

SF / Student

  Bid Date or Final GMP Approval Date

RRISD Blackland Prairie Elem. 800 PK - 5 94535 $ 10,617,030 $ 112.31 $ 13,271 118.17   Apr-00

RRISD Cactus Ranch Elem. 800 PK - 5 94535 $ 11,214,619 $ 118.63 $ 14,018 118.17   Aug-00

RRISD Union Hill Elem. 900 PK - 5 106764 $ 14,120,000 $ 132.25 $ 15,689 118.63   Jun-01

HCISD New Elementary (Negley ES) 880 1 - 5 92222 $ 10,514,000 $ 114.01 $ 11,948 104.80   Feb-05

HCISD New Elementary (Science Hall) 800 1 - 5 86884 $ 10,443,649 $ 120.20 $ 13,055 108.61   Mar-05

LISD New Elementary No. 16 877 PK - 5 100472 $ 13,477,555 $ 134.14 $ 15,368 114.56   May-05

LISD New Elementary No. 17 877 PK - 5 100472 $ 14,019,581 $ 139.54 $ 15,986 114.56   May-05

SMISD New Elementary (Bowie) 700 K-5 80888 $ 10,026,911 $ 123.96 $ 14,324 115.55   May-05   

4. CEFPI Project Cost TrackingProject Information SpreadsheetProject Information

Project Information SpreadsheetBid Date by Year and Actual Inflation Rate

Inflation History

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090.03 0.01 0.005 0.02 0.005 0.015 0.05 0.1 0.07 0.06 0.05 0.12 0.01

                  projected

$ 10,617,030

$ 10,670,115

$ 10,830,167

$ 11,371,675

$ 12,508,843

$ 13,384,462

$ 14,187,529

$ 14,896,906

$ 16,684,535

$ 16,851,380

$ 112.31

$ 113

114.56

120.29

132.32

141.58

150.08

157.58

176.49

178.26

$ 11,214,619

$ 11,270,692

$ 11,439,752

$ 12,011,740

$ 13,212,914

$ 14,137,818

$ 14,986,087

$ 15,735,392

$ 17,623,639

$ 17,799,875

$ 118.63

$ 119

121.01

127.06

139.77

149.55

158.52

166.45

186.42

188.29

$ 14,120,000

$ 14,331,800

$ 15,048,390

$ 16,553,229

$ 17,711,955

$ 18,774,672

$ 19,713,406

$ 22,079,015

$ 22,299,805

$ 132.25

134.24

140.95

155.05

165.90

175.85

184.64

206.80

208.87

$ 10,514,000

$ 11,144,840

$ 11,702,082

$ 13,106,332

$ 13,237,395

114.01

120.85

126.89

142.12

143.54

$ 10,443,649

$ 11,070,268

$ 11,623,781

$ 13,018,635

$ 13,148,821

120.20

127.41

133.79

149.84

151.34

13,477,555

$ 14,286,208

15,000,519

16,800,581

16,968,587

134.14

142.19

149.30

167.22

168.89

14,019,581

$ 14,860,756

15,603,794

17,476,249

17,651,011

139.54

147.91

155.30

173.94

175.68

4. CEFPI Project Cost Tracking

4. CEFPI Project Cost Tracking

2009 2010 2011 2012 2013 2014

0.01 0.06 0.06 0.06 0.06 0.06projected projected projected projected projected projected

$ 16,851,380

$ 18,934,211

$ 20,070,263

$ 21,274,479

$ 22,550,948

$ 23,904,005

178.26

200.29

212.31

225.04

238.55

252.86

$ 17,799,875

$ 19,999,939

$ 21,199,936

$ 22,471,932

$ 23,820,248

$ 25,249,463

188.29

211.56

224.25

237.71

251.97

267.09

$ 22,299,805

$ 25,056,061

$ 26,559,424

$ 28,152,990

$ 29,842,169

$ 31,632,699

208.87

234.69

248.77

263.69

279.52

296.29

$ 13,237,395

$ 14,873,537

$ 15,765,949

$ 16,711,906

$ 17,714,621

$ 18,777,498

143.54

161.28

170.96

181.21

192.09

203.61

$ 13,148,821

$ 14,774,016

$ 15,660,457

$ 16,600,084

$ 17,596,089

$ 18,651,855

151.34

170.04

180.25

191.06

202.52

214.68

16,968,587

19,065,904

20,209,858

21,422,450

22,707,797

24,070,265

168.89

189.76

201.15

213.22

226.01

239.57

17,651,011

19,832,676

21,022,637

22,283,995

23,621,035

25,038,297

175.68

197.40

209.24

221.79

235.10

249.21

Project Information SpreadsheetInflation Rate Projected

5. What Lies Ahead

Short Term Long Term

5. What Lies Ahead

Aluminum

Copper

West Texas Crude Oil

Price HistoryNovember 1999 thru October 2009

5. What Lies Ahead

Industry depends on specific materials that: Are in demand worldwide Have erratic supply growth Are heavy, bulky or hard to transport

Construction requires physical delivery Thus, industry is subject to price spurts,

transport bottlenecks, fuel price swings Expect 6 to 8% PPI increases, higher

spikes

Outlook for materials (beyond ‘09)

Source: The Associated General Contractors of America

5. What Lies Ahead

Nonres spending: 0 to -5% (more stimulus put in place, maybe gains in retail, higher ed, hospitals)

Res: +5 to +10% (SF up, MF down all year)

Total construction spending: -4% to +2% Materials costs: 0% to +8% Labor costs: +3% or less

Summary for 2010

Source: The Associated General Contractors of America

5. What Lies Ahead

Presented by:

Jimmy Disler, Leander ISD Jimmy.Disler@leanderisd.org

Ed Sevcik, Round Rock ISD Ed_Sevcik@roundrockisd.org

Marty Burger, American Constructors MBurger@acitexas.com

Steve McCleskey, Bartlett Cocke SMcCleskey@bartlettcocke.com

CEFPI School Construction Cost Summary http://media.cefpi.org/southern/texasnorth/CTConstructionCostReport102709.xls

Construction Cost Trends