flexiblefullpage - default
Currently Reading

Labor Drives Regional Variation in Construction Costs

billboard - default

Labor Drives Regional Variation in Construction Costs

December 28, 2018
Labor costs_material costs for construction_regional variation
Photo: Unsplash

Recent analysis from BuildZoom found that between construction’s two major cost contributors, material and labor, material prices remain relatively stable among U.S. regions, while labor costs vary greatly.

Construction costs have risen 23.6 percent overall since 2004, and tend to be most expensive coastal cities or hard-to-reach places such as New York, San Francisco, and Honolulu. These same cities generally see much higher labor costs than average, for example, New York’s labor costs were between 64.6 and 78.2 percent more expensive than the 30-city average between 2008 and 2018.

The differences in material costs are so much smaller than the differences in labor costs because materials are a tradable good, whereas labor is not. Goods that can be traded across locations tend to converge towards a common price everywhere. Of course, discrepancies can persist inasmuch as prices are driven by the cost of transporting the goods, but otherwise, they tend to be similar everywhere... The wages of construction workers, on the other hand, vary by location and are influenced by the cost of living and the different labor market conditions in each city. Despite the relative ease of geographic mobility in the US, most people remain in their state of birth–especially those without a college degree. Moreover, when workers migrate their compensation tends to shift as well.

Read more

leaderboard2 - default

Related Stories

Quality Matters

5 Ways to Silence Squeaky Floors

Take these tips to heart to deliver quiet floors and satisfied homeowners

Trade Contractors

Which States and Construction Trades Rely Most on Immigrant Workers?

California and Texas have higher concentrations of immigrants in their construction workforce, and certain skilled trades also rely more on foreign-born labor than others

Quality Matters

Tips for Placing HVAC Ducts in Conditioned Space

See how putting HVAC ducts inside conditioned space in a home benefits both the builder and the homeowner

boombox1 -
native1 - default
halfpage2 -

More in Category

Delaware-based Schell Brothers, our 2023 Builder of the Year, brings a refreshing approach to delivering homes and measuring success with an overriding mission of happiness

NAHB Chairman's Message: In a challenging business environment for home builders, and with higher housing costs for families, the National Association of Home Builders is working to help home builders better meet the nation's housing needs

Sure there are challenges, but overall, Pro Builder's annual Housing Forecast Survey finds home builders are optimistic about the coming year

native2 - default
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.