Reconstruction costs have continued to rise in the second quarter of 2020, based on an interim data review. This examination of cost trends at the national and state levels, which supplements Verisk’s regular 360Value® Quarterly Cost Update, aimed to identify any short-term impacts of business shutdowns triggered by the COVID-19 pandemic.
All rates, percentages, increases, and decreases, are calculated as percentage change from March 2020 to April 2020, unless otherwise noted.
Changes in reconstruction costs by state
Reconstruction costs increased in all states. Hawaii, New Jersey, and Nevada had the highest changes at 3.40%, 1.56%, and 1.46%, respectively. North Carolina had the lowest change at 0.51%.
Material Cost Analysis
Costs were up for all categories, with the exception of roofing and carpet. Lumber composite costs saw the highest increase at 1.01%. The remaining categories increased just 0.11% to 0.37%. These costs are all up from March 2019 to April 2019, which remained relatively flat except for a reversal of the negative trend in lumber.
Labor Cost Analysis
All common labor trades saw cost increases. Drywall installer/finisher costs increased the most at 2.82%. Roofer cost increases trailed at 1.22%. Heating/AC mechanic costs continued to have the lowest total increase at 0.49%. On average, overall costs are 0.8% higher than the same time period in 2019, with installer/finisher having the greatest cost increase at more than 2 percent.
Trends were derived from building cost research conducted by industry leader Xactware®, a Verisk business, and validated at a highly localized level. Our comprehensive research process includes real-time feedback on reconstruction costs from tens of thousands of contractors and claims adjusters, extensive material and labor cost surveys, and analysis of more than 5 million actual damage repair estimates for claims each year.