Construction costing more, taking longer to complete
A shortage of materials is putting construction on hold as workers wait months for back-ordered items to become available. The construction industry is also seeing the highest price hike in more than 50 years.
"I have never seen it quite like this," Linda Allard, the president of LA Design said. "Pretty much everything has somewhat doubled in time to get products to our job sites."
For Allard, it means the typical renovation project is taking longer and costs more.
"We are ordering materials earlier," Allard said. "We're looking at alternative products."
The U.S. Census Bureau said construction costs have increased nearly 18% between 2020 and 2021. That's the largest year-to-year increase they have seen in material costs since 1970.
"Copper has doubled, steel has gone up, aluminum has increased," Conor Barry, vice president of business development at Miami Systems Inc., said.
Barry said huge demand is putting pressure on supply.
"We have lead time constraints, material shortages related to customs and overseas imports," Barry said.
With these challenges, tenants have been forced to expect delays. At ISG Marketing, their office took longer to build than expected.
"It means double the rent when you're trying to get into a new space and also coordinate the move of 700 employees from the old facility to the new facility," Josh Slater, the CEO of ISG Inc. said. "So, we were able to make it. Everything worked out, but it's not without its issues."
But those in the construction industry are hopeful prices will fall back down.
"I think we're all very positive," Allard said. "I think that we're not going to give up. We're going to keep fighting, and we've got a lot to look forward to."
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