Construction Costs: Construction Cost Pressures Linger
U.S. Construction Cost Index
30,000
4.0% YOY
25,000
20,000
3.5% YOY 5.7% YOY 4.2% YOY
15,000
10,000
5,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Construction Building Common Labor Skilled Labor
Source: Engineering News Record (ENR) (McGraw-Hill); Monthly data series
Canada Construction Cost Index
3.7% YOY
120
100
80
60
Source: StatsCan, Cushman & Wakefield Research; Quarterly data series
• Average annual construction costs for 2025 remained below the 10-year average in most markets. However, several countries have seen growth pick-up compared to the three-year average. In the United States, rising material costs, coupled with persistent skilled labor shortages, have placed upward pressure on pricing. Despite these headwinds, limited construction activity has helped offset these conditions. • In Canada, while construction cost escalation has moderated from peak levels during the global pandemic, construction costs appear to have reset to a structurally higher baseline. Ongoing trade uncertainty, persistent labor constraints and sustained wage growth will continue to exert upward pressure on construction costs, limiting the prospect of a return to pre-2020 levels. • In Mexico, cost increases have been more moderate supported by competitive labor conditions, though nearshoring-related industrial activity has sustained demand in certain regions. Brazil has seen cost escalations ease from prior peaks but has recently climbed above its three-year average. Argentina, meanwhile, has experienced a marked deceleration in price growth as recent policy measures have slowed the pace of increases.
Latin America Construction Cost Index
100% 150% 200% 250%
0% 50%
4% 22% 6%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Mexico
Argentina
Brazil
Source: Moody’s Analytics, Cushman & Wakefield Research; Monthly data series
10
11
Cushman & Wakefield
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