AbstractHighway construction costs are subject to significant variations over time. These fluctuations are apparent in trends of indices, such as the national highway construction cost index (NHCCI). These variations are problematic for highway contractors because they can result in bid loss or profit loss. They are also problematic for owner organizations, such as State Departments of Transportation (State DOTs), because they can result in hidden price contingencies, delayed or cancelled projects, inconsistency in budgets, and unsteady flow of projects. These problems can be prevented if highway construction costs are forecasted accurately. Existing literature lacks appropriate models to accurately forecast NHCCI. The objective of this research is to identify the leading indicators of NHCCI (i.e., the explanatory variables of NHCCI that are useful to predict NHCCI), and create appropriate multivariate time series models for forecasting NHCCI through utilizing information available from the identified lea...