U.S. construction costs are set to increase by 3% to 6% in 2024, following an average increase of 4% in 2023, according to a report published by Currie & Brown, a of cost management, project management and advisory service.

Cost escalation will challenge construction firms, which will need to develop new processes and capabilities to keep costs under control and projects on track.

Currie & Brown also forecasts significant variation in cost escalation between major cities. Construction costs in Chicago, Illinois, are predicted to rise 3.5% in 2024, compared to 6% in Phoenix, Arizona. This means that a $10 million project built in Phoenix in 2023 will cost $10.6 million this year, while the same project built in Chicago will cost $10.35 million.

“By proactively engaging in sustainability, adopting digital technologies, and evolving work methodologies, operational efficiencies can be realized," said Rachel Personius, associate director, Currie & Brown. "This proactive stance will help mitigate the impact of current and future construction cost increases and contribute to the development of better, sustainable built environments for all."