Although ENR’s cost indexes measure the costs of non-residential buildings, the stalled recovery in the housing market still had a major impact on index movement. After falling 27% over the previous five years, lumber prices spiked in the first quarter of last year as federal tax credits boosted the depressed housing market. But lumber prices faded as the housing recovery stalled, ending the first quarter of this year about 4% above 2010’s level. In addition, steel prices also spiked in 2010.
As a result, the Building Cost Index (BCI) is up 4.1% over a year ago after increasing just 0.9% the previous year. The Construction Cost Index (CCI) is less affected by these swings in prices.