Although the ENR indices measure the costs of non-residential buildings, the housing market has had a significant impact on the movement of the index. The 20-city ENR average annual steel price rose 11.9% by the end of 2025, while the global materials cost index saw a 2.5% increase. Skilled and common labor increased by 5.7% and 4%, respectively.
The Construction Cost Index (BCI) ENR increased by 4.2% over the year, while the Construction Cost Index (CCI) increased by 3.6% over the same period.
ENR began systematically reporting changes in material prices and wages in 1909, but did not establish the ICC until 1921. It was designed as a general-purpose tool for charting trends in core costs, and today it remains a weighted aggregate index of the prices of a constant amount of structural steel, portland cement, lumber, and common labor. This bundle of goods was valued at $100, using 1913 prices.
The original use of common labor in the CCI was intended to reflect the wage activity of all construction workers. In the 1930s, however, wage rates and marginal benefits rose much faster in percentage terms for common workers than for workers in skilled trades. In response to this trend, ENR in 1938 introduced its BCI to weight the impact of skilled labor wage changes on overall costs.
The labor component of the BCI is the union’s average wage rate, plus additional benefits, for carpenters, bricklayers and ironworkers. The materials component is the same as CCIs. The BCI also represents a hypothetical package of these building blocks, valued at $100 in 1913.
Both indices are designed to indicate basic underlying trends in construction costs in the US. Therefore, the components are based on construction materials that are 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.
As a practical matter, ENR selected these materials because reliable price quotations are available for all three, ensuring that both indices can be calculated in a timely manner. While there may be some weaknesses in any index based on a limited number of components, ENR believes that a larger number of components would increase the delay between price verification and index release. Also, an index with fewer components is more sensitive to price changes than one with many.
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Selection of materials
However, as a drawback, the use of a few cost components can make individual city indices more vulnerable to source changes. These aberrations tend to be the average of the 20-city indices, which ENR recommends for general use.
Because indices are calculated using actual prices, the proportion of a given component within the index will vary with its relative rate of escalation.
In the late 1970s, the labor share of the index fell because material prices were in the grip of hyperinflation. In 1979, for example, lumber prices rose 16 percent, cement prices rose 13 percent, and steel prices rose 11 percent, but labor rose only 8 percent. These developments resulted in materials gaining a larger percentage of the index.
In the original CCI, the components were weighted 38% for labor, 38% for steel, 17% for wood, and 7% for portland cement. The changing tide of inflation shifted the weighting of the ICC’s components, making labor 81%, steel 13%, wood 5% and 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.
None of the indexes are adjusted for productivity, contractor overhead, or profit. However, indexes can be fixed
these factors. As a general rule, when productivity is low, the selling price will be relatively higher than the ENR index. In general, when competition is strong, the sale price of completed construction will fall below ENR indices.
