Construction costs have skyrocketed over the past few years. In today’s superheated market, construction demand and associated costs are at an all-time high. Coming out of the COVID-19 pandemic, material costs, supply chain issues, and limited labor contribute to the problem. Depending on the specific project type and region of the country, each dollar spent in today’s market buys between 65% to 75% of what it would have before 2000. With numbers like these, you may be wondering:
- Will construction costs come down over the next few years?
- Should I postpone my project and wait for lower construction costs?
- Will construction costs escalate further?
Be Smart, Think Strategically, and Plan Ahead
Here are some key strategies to help mitigate delays, reduce escalation risks, and successfully implement your design and construction project:
SELECT AND ENGAGE THE RIGHT TEAM: Invest time and effort in finding the right design and construction partners. Architects and Contractors are busy! In today’s market, developing solid relationships with people you trust and who can deliver is even more critical.
UNDERSTAND THE MARKET: Knowing the challenges of today’s construction market will help you effectively work within it. Be aware of changes in Construction contracting that have emerged, reallocating the risk of continued cost escalation to Owners.
INCLUDE OPTIONS AND ALTERNATIVES: With limited availability of materials and finishes, keep your options open. Work with your design and construction team to identify and plan for alternatives.
LOCK IN COSTS EARLY: Encourage collaboration within your design and construction team to develop project scope and construction documents within the established budget/GMP contract early
in the process.
PROCURE AND STORE MATERIALS: Work with your Contractor to procure and warehouse materials and equipment. Expedite processing of submittals and shop drawings so that orders can be placed and fabrication started early.
VALIDATE: Trust but verify. Does it pass the sniff test? Take a step back from it and ask yourself, does it make sense? So many times, teams get to work without stopping to assess if the timelines represented make sense. Though common sense, validation is an important step.
About the Author: Marcus Vess’ career spans nearly three decades, where he spent time in planning, design, and construction of facilities improvement projects. He is an experienced director of large-scale capital projects and programs and is credited with delivering projects with a combined value of more than $1 billion. For more insights, strategies, and assistance with how to effectively plan, design, and construct your next project, contact Marcus today.