Assistant Professor Wayne State University detroit, Michigan, United States
Abstract: Understanding the factors driving fluctuations in the National Highway Construction Cost Index (NHCCI) is essential for predicting future cost trends and enhancing decision-making in infrastructure planning. This study provides an empirical investigation into the relationship between NHCCI and key economic, energy, and construction market variables, using historical time series data to identify significant correlations and trends. The research examines the influence of macroeconomic indicators, such as inflation rates, interest rates, and GDP growth, alongside energy market variables, including oil prices and fuel costs, as well as construction-specific factors like material prices, labor costs, and supply chain disruptions. Using advanced econometric techniques, including vector autoregression (VAR) and cointegration analysis, this study analyzes the interplay between these variables and their impact on the NHCCI over time. By leveraging historical data from the Federal Highway Administration (FHWA), the Bureau of Labor Statistics (BLS), and the Energy Information Administration (EIA), the research explores both short-term and long-term effects of market volatility on highway construction costs. The results provide valuable insights into the primary economic and market drivers of NHCCI changes, offering transportation agencies, policymakers, and contractors a deeper understanding of cost escalation risks. This research highlights the importance of considering external market variables when forecasting highway construction costs and proposes strategies for incorporating these insights into cost management frameworks. Additionally, the study discusses the implications of these findings for future infrastructure investment, risk mitigation, and the adoption of adaptive procurement practices in the face of economic uncertainty. This empirical investigation contributes to the growing body of knowledge on cost management in transportation infrastructure and supports more resilient and sustainable project planning efforts.
Learning Objectives:
Attendees can expect to learn the following from this session:
Describe the key economic, energy, and construction market variables that influence fluctuations in the National Highway Construction Cost Index (NHCCI).
Analyze historical time series using econometric techniques to identify relationships between NHCCI and macroeconomic factors such as inflation, oil prices, and labor costs.
Evaluate the short-term and long-term impacts of economic and market volatility on highway construction costs and propose strategies for integrating these findings into cost forecasting and risk management frameworks.
