MILWAUKEE — Construction costs in Milwaukee were essentially flat in the final quarter of 2023, and the city’s costs have trailed behind the national average, according to Mortenson’s latest Construction Cost Index. 

“The overall outlook for non-residential construction is cautiously optimistic, as flattening construction material costs, lessening oil prices, and confidence in the likelihood of interest rate cuts remain somewhat offset by continued workforce challenges and some continued areas of volatility,” officials said in a statement. 

Nonresidential construction costs in the U.S. were almost flat in the final quarter of 2023, increasing by only 0.07%, according to the report. This was the smallest increase since pre-pandemic business and rides on the heels of a 0.19% increase in Q3 2023, which officials said was a sign of stable material prices. 

Additionally, subcontractor costs rose 0.3% and materials decreased 0.2%, the report showed. Labor costs were flat, the report added. 

In Milwaukee, costs increased by 0.01% in the fourth quarter, the report showed. Over the last 12 months, costs in Cream City increased by 2.1%; costs increased by 2.2% nationally. 

Construction employment totaled 35,300 workers in the Milwaukee area in December 2023, the report showed. The 5% year-over-year increase, or 1,600 more workers. However, officials noted availability and cost for qualified workers was still a challenge. 

In December, construction added 17,000 jobs in the U.S., and the industry added 197,000 jobs over the last 12 months. The industry unemployment rate dropped to 4.4% last month. 

According to the report, market watchers expect the Fed will cut interest rates between 1% and 1.5% this year. Rates could land around 4% in December 2024, the report added. 

Most commodity prices were stable in the last quarter, but the report showed variance among some materials. For example, aluminum sales plunged while copper future surged for purposes like decarbonization projects. 

The report also had its eye on global shipping costs, which it showed was likely to rise in 2024 due to issues at the Panama and Suez canals.