Turner Index Reveals 3.6% Increase in Non-Residential Building Costs Year-to-Year

Non-residential building construction costs rose in the third quarter as lead times and regional prices increased throughout the United States. Turner Construction, the largest general contractor in the U.S., recently released its third quarter 2024 Turner Building Cost Index, measuring costs in the country’s non-residential building construction market. 

Higher costs trickle down to the glass and glazing industry in various ways, including supplier pressure, reduced budgets and consolidation as smaller players struggle to absorb higher costs. However, increased construction costs lead to more retrofits, increasing demand for energy-efficient replacement windows or secondary glazing. This is a boon for companies such as LuxWall and Alpen High-Performance Products, which received multiple governmental grants and investments to manufacture energy-efficient windows and retrofit existing building stock. 

According to Turner’s data, commercial building costs are up 3.6% from the third quarter of 2023 and up 0.77% from the second quarter of 2024. Attilio Rivetti, Turner’s vice president in charge of gathering the company’s Index data, says increased costs vary between geographical regions. 

“Projects across various geographic regions are experiencing cost increases at higher rates than others due to localized robust construction activity in these markets as well as driven by numerous mega projects underway,” he explains. 

Despite the 3% year-to-year increase, Rivetti notes that material prices remain stable over the past two quarters of 2024. Due to high demand, mechanical and electrical equipment experienced longer lead times and continued cost increases. At the same time, glass and glass product manufacturing costs, including flat glass, dropped in November, per the U.S. Labor Department’s Bureau of Labor Statistics’ Producer Price Index (PPI). 

The most recent PPI shows that glass and glass product manufacturing prices decreased by 0.9% in November but remained elevated yearly as manufacturing costs increased by 1.6% compared to November 2024. The cost of flat glass products also dropped in November, declining by 3.4%. This is the first price drop for flat glass products in several months. 

Turner’s Index is determined by several factors considered nationwide, including labor rates and productivity, material prices and the competitive condition of the marketplace.