What does a construction cost index measure?

A construction cost index measures trends in construction costs over time relative to a base value. It provides a statistical study that helps to analyze how the prices of construction materials, labor, equipment, and other associated costs change over time. By using a base year for comparison, it allows construction professionals, economists, and planners to assess the current state of construction costs in relation to previous periods, facilitating budget planning and financial forecasting.

This kind of index can also help in adjusting bids for inflation or changes in market conditions, enabling more accurate budget projections. Therefore, option B captures the essence of what a construction cost index truly represents and its significance in the industry.