Although ENRA rates measure the costs of non -residential buildings, the housing market has had a significant impact on the movement of indices. The average annual price of 20 cities enroused for steel increased by 11.2% by the end of 2024, while the general cost index of materials experienced a 3% increase. Both the skilled labor and the commune experienced a modest gain. The ENR building cost rate increased by 1.6% during the year, while the construction cost rate increased by 0.9% in the same period.
ENR systematically began to inform changes in prices and material salaries in 1909, but did not establish the CCI until 1921. It was designed as a general purpose tool to draw basic cost trends, and today it is still an aggregate index weighted in the prices of a constant amount of structural steel, cement of Portland, wood and common laboratory. This package of goods was valued at $ 100, with 1913 prices.
The original use of common work in the CCI aimed to reflect the salary activity for all construction workers. In the 1930’s, however, salary and strip benefits rates increased much faster in percentage terms for common workers than for specialized trades workers. In response to this trend, in 1938 it introduced its construction costs (BCI) to weigh the impact of salary changes in general costs.
The BCI employment component is the average union salary rate, as well as the benefits of Fringe, for carpenters, bricks and iron workers. The component of materials is the same as the CCI. The BCI also represents a hypothetical package of these construction items, with a value of $ 100 in 1913.
The two rates are designed to indicate the basic underlying trends of construction costs in the United States, so components are based on construction materials less influenced by local conditions. Enr chose steel, cement and wood because they have a stable relationship with the US economy and play a predominant role in construction.
Materials options
As a practical question, Enr selected these materials because reliable price contributions are available for the three, ensuring that the two indices can be calculated on time. Although there may be some weaknesses in any rate based on a limited number of components, Enr believes that a larger number of elements would increase the time between verifying prices and the release of the index. In addition, an index with less components is more sensitive to price changes than one that includes many.
In the disadvantage, however, the use of only a few cost components can make the individuals of individual cities more vulnerable to source changes. These aberrations tend to mid the rates of 20 cities, which Enrum recommends for general use.
As the indices are calculated with real prices, the proportion of a given component within the index will vary with its relative climbing rate.
In the late 1970’s, the share of the labor index fell because the prices of the materials were in the prey of hyperinflation. In 1979, for example, wood prices increased by 16%, cement prices increased by 13%and steel prices jumped by 11%, but labor increased only by only 8%. These developments resulted in the materials obtaining a larger percentage of the index.
In the original CCI, the components were weighted at 38% for labor, 38% for steel, 17% for wood and 7% for Portland cement. The tide of change of inflation changed the weight of the CCI components, making the labor 81%, the steel 13%, the wood 5%and the cement 1%. This change was less dramatic for the BCI, which is now 66% for labor, 23% for steel, 9% for wood and 2% for cement.
Nor is the index for productivity, contractor or benefits. However, indices can solve these factors. As a rule, when productivity is low, the sale price will be relatively higher than the RENR index. Generally, when the competition is clear, the finished construction sale price will be reduced below the Red Indexes.
