We discuss the labor shortage in construction and how it affects construction projects
New Building Construction Costs: What You Need to Know
For anyone in the construction industry, understanding and communicating building construction costs can often times be an elusive conversation to have no matter how much research you’ve done. There are numerous factors to take into consideration when estimating commercial construction costs and new building construction costs. It is essential to understand the cost drivers for any commercial project as each of them can be variables that will alter the bottom line.
Everything You Need to Know About New Building Construction Costs
While these variables are always a part of the initial discussions, it’s extremely important to make sure that you are truly ready for new building construction costs.
Before we get started, it should be noted that not all types of construction cost the same per square foot as the cost of construction per square foot varies with location throughout the United States. The location alone can represent as much as 70% of the cost driver, as the median range for commercial building construction is anywhere between $100 and $170 per square foot.
Additionally, climate also plays a considerable part when it comes to location-specific expenses. For example, buildings in colder climates may need to handle large volumes of snow and will be engineered accordingly. The same goes for structures that are built in areas that experience hurricanes.
Lastly, it is also important to consider any political events such as tariffs that could potentially change the price of materials that need to be imported from a different country. With so many variables involved, price figures per square foot can vary radically for commercial buildings.
Whether you are a property owner or a contractor, you always want to have a clear and accurate forecast of how much a building project will cost and how long it will take to complete. However, the timeline for new building construction can have their fair share of snags along the way, and closing can be pushed back by a few days or in some cases few months.
Variables such as permit hiccups, weather events, construction accidents, or labor shortages are all things that can draw out a construction timeline. Underestimating, as well as overestimating, can both have negative consequences which is why no matter what type of estimate you’re given, it’s important to remain flexible.
Time and Labor
As we mentioned above, material costs can vary depending on the region, but labor costs can also vary depending on where your construction project is located as regional labor costs can play a role in determining costs. Geographic region and what workers are paid in that region is a key component of the cost per square foot of new building construction. Whether you need to hire an architect, carpenter, concrete professional, or a painter, each is paid differently depending on where you are at in the country.
When estimating building costs, common expenses are often overlooked. Building construction is a process and surprises are likely to come up along the way.
Some of these surprises include:
- Site preparation (clearing a lot of trees, hauling dirt, removing rocks)
- Permit fees (local building codes, zoning laws, and restrictions)
- Time of year (labor is in demand during times of unemployment and low economic growth which means costs are typically higher)
While the list of potential surprises will vary depending on the construction project, you should always make sure to have a bit of a financial cushion or emergency fund (we recommend at least 10%) so that you aren’t left without the money when a surprise does arise.
Commercial building construction requires an experienced team that values both your investment and your time. For over a decade, Camm Construction has worked on a multitude of commercial construction projects and learned how to prevent cost issues before they happen. We are honest about how long it takes to realistically complete a project and the hurdles that may come with it.
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