Cost Trend Update Bulletin – December 2019

The Duff & Phelps Cost Trend Update is now available for both the construction cost and equipment cost indices. This trend update shows national averages for the United States from January 2016 to December 2019 and demonstrates how the last four years have been relatively stable for construction after a decade of volatility, while the equipment cost indices continues to show moderate year-on-year changes. 

Construction Cost Indices

Through the first three quarters of 2019, we are seeing construction costs fall back, even to a point below historical average increases from some of the sources.

Equipment Cost Indices

All three sources for equipment cost indices had significant increases in 2018, compared to the previous three years. This trend has flattened into 2019 in two of the three sources.

Please be reminded that these indices are just average indicators of change and they are not absolutes. Duff & Phelps advises that every five to seven years, you should establish a new replacement cost basis by using a qualified valuation professional.

Please contact Brad Schulz to discuss establishing a new replacement cost basis.