How Will the State of the Economy Impact MY Project in 2023?

Inflation, recession, supply-chain issues and labor shortages; all buzzwords you hear about the design and construction industry.?What does it REALLY mean to you and your project??

To answer that question, you need to understand what you are building and who is building for you.

What are you building??

Building a $100,000,000 mega project versus a $3,000,000 private project are tremendously different project types with different subcontractors, suppliers, architects, and engineers at the table.?

Several material costs have gone up more than usual over the past 18 months (steel, copper, plastics, etc.) but are currently trending down.?Labor price increases have remained consistent year-over-year at about a 2.5%-3.5% increase. ?In the construction industry, subcontracted costs are split approximately 60% labor and 40% materials, with some exceptions.?A 30% increase in a material cost does not equal a 30% overall increase in that project scope.

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In addition, renovation projects and interior tenant finishes don’t typically include building trades that have increased the most in costs (building shell components-steel, windows, roofing, HVAC equipment, electrical and plumbing services) so your project cost may not be as impacted by this uncertain economy as you might think.

Who is building for you???

Have you selected a reputable general contractor who is experienced in construction management, has trusted relationships with subcontractors and suppliers and has project management staff that understand the nuances of pre-ordering and securing pricing on critical building systems and components? ??

Does your general contractor understand how material and systems specifications can impact overall cost on a project??

If so, you can certainly manage your overall project budget and still complete an extremely high-quality project!

Building in 2023 does not have to be expensive, scary, unpredictable or frustrating.?

Choose projects, delivery systems and team players wisely to maximize your building design and minimize your project cost, risk and schedule!?

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Darin is a licensed architect and owner of Pearce Construction, a commercial general contractor in Kansas City.?Pearce Construction specializes in Construction Management work with an emphasis on new buildings, building additions and building renovations.?Over 50% of our work is repeat clients and over 75% is direct referral.??