Cost Trend Update Bulletin – January 2018

The Duff & Phelps cost trend update is now available for both the Construction Cost and Equipment Cost indices. Construction costs have been relatively stable over the last five years, averaging an increase of approximately 2.25%. However, that changed in 2017, with an increase of 2.7% to 4% in three of the four indices Duff & Phelps uses to track US construction costs. Average equipment costs indices are also trending to above average, with increases in the 0.9% to 2.6% range.

Please be reminded that these indices are only average indicators of change and they are not absolutes. Duff & Phelps advises that after five to seven years, you should establish a new replacement cost basis with the assistance of a qualified valuation professional. Please contact Mark Bobber at Duff & Phelps to discuss establishing a new replacement cost basis.

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