LSI Index
What is the LSI index...
Mary E. Wallers, President and CEO of Sierra West Group, has been the exclusive author of the LSI Construction Cost index since 1992. The LSI Cost Index reports changes in construction materials, labor and costs. Components of the index include materials, labor and Sub-Contractor in-place costs-(In-place costs reflect the actual prices being charged by Contractors and Sub-Contractors for installed systems) these costs include profit and overhead. The percentages of increases in relevant costs are reflected throughout the construction industry, residential, commercial and public work.
The Materials Index reflects 23 key construction materials in 20 cities, throughout the U.S. The various locations allows for overall stability of the material prices without regional spikes in demand. The prices which are derived from information taken from the Engineering News Record (ENR) – is done on a monthly basis.
The Labor Index is based on quotes for nine crafts in 16 cities across the U.S. All contractors do not pay the same rates; therefore, by using unions as the basis for the rates, the percentage increases are stabilized and reflect, on the whole, wage trends. These increases generally reflect the same percentage increases in private and prevailing wage work.
The Sub-Contractor in-place costs are used most by the State and Federal Government to reflect the actual prices being charged by contractors and subcontractors for installed systems, including profit and overhead. The unit prices are derived from a variety of contractors, including actual schedules of value, change orders, actual bids submitted by contractors on various projects. Again, the percentages of increases are reflected throughout the construction industry, residential, commercial and public work.
These components are then further defined into three construction categories consisting of concrete construction, steel construction and Wood Frame Construction. Ms. Wallers compiles this data on a monthly basis to ensure that the index is as accurate as possible for the quarterly update to ENR Magazine. This effort provides a great advantage to SWG’S Estimators allowing them to handle inflationary trends and local market conditions with ease.
