In spite of fluctuations in the economy, there is good news for the commercial building industry. According to the Architecture Billing Index (ABI) released by the American Institute of Architects, nonresidential construction spending hit a seven-month high in September 2013 with the latest reports expecting a 17% increase in commercial construction throughout 2014. This will be led by a considerable uptick in warehousing and hotel construction, as noted by the McGraw Hill Construction’s 2014 Dodge Construction Outlook. The same report predicts total construction starts will rise by 9% this year.

However, construction costs continue to rise, with many believing that expenses will outpace the growth produced by the recovery. This was reinforced by a recent report from the Rider Levett Bucknall’s Construction Cost Index, which revealed a 3.6% in construction costs in 2013. This also coincides with the Engineering News-Record’s (ENR) Building Cost Index (BCI) that showed a steady increase in New York City construction costs that rose 3.55% in 2011 and 2.42% in 2010.

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