Comparing Construction Prices 1968 to 2008

May 17, 2008 11:15 AM

I need to compare construction costs in 1968 to costs for a similar project in 2008.

I'm not a math/finance person, so I apologize in advance if there is an easy answer to this one.

For a marketing presentation I'm giving next week, I need to be able to compare the cost of a building built in 1968 (for a total of $3 million) to a comparable building that is scheduled for completion later this year.

My final statement will hopefully look something like:

"The original building was completed in 1968 at a total cost of $3 million. Built today, a similar building (on a dollar for dollar basis) could cost approximately $XX million dollars. Thus the proposed structure is [ right on target / dramatically lower than / ludicrously higher than ] the original built 40 years ago."

I do realize that there are an infinite number of variables and distinct differences between how the buildings would be built, the forms and functions, etc. Just keep in mind that this is marketing, not rocket science. I need a sound bite more than I need an in depth study.

Thanks for your help!

posted by viewmastr to Work & Money (5 answers total)

According to an online inflation calculator:

What cost $3000000 in 1968 would cost $18440513.09 in 2007.

So 18.4 million is a good simple inflation fix. I doubt you would need more than inflation for a casual presentation like this.
posted by damn dirty ape at 11:36 AM on May 17, 2008

Or 18.6 million according to this one.
posted by damn dirty ape at 11:37 AM on May 17, 2008

"I do realize that there are an infinite number of variables and distinct differences between how the buildings would be built, the forms and functions, etc. Just keep in mind that this is marketing, not rocket science. I need a sound bite more than I need an in depth study."

You've pretty much ruled out any relevant analysis, so why are you asking this question?
posted by 517 at 11:50 AM on May 17, 2008

Agree with 517. There are simply too many things that have changed since 1968. You have the obvious inflation numbers, but you'd also have to take into account technological changes, modern building codes, land use regulations that have come into force over the past 40 years, environmental calculations (1968 would be prior to the EPA, Clean Air Act, etc.), historic preservation, the financial environment, etc. My guess would be that all of these changes will make your modern building appear to be very costly compared to a structure built in 1968, but that apparently greater cost won't mean very much because it's not an apples to apples comparison.
posted by chengjih at 1:40 PM on May 17, 2008

Do a search for "enr building cost index" or "enr construction cost index". Either search will give somewhere on the first page a historical list of indices. ENR is the Engineering News Record magazine which has reported on the construction industry for over a hundred years. I'll leave it up to you to use the CCI to calculate the comparison. It isn't too difficult to calculate but I don't want to do all of your homework for you ;)
posted by JJ86 at 8:16 PM on May 17, 2008