Why are Construction Costs Rising?
Any West Palm construction attorney will tell you that the construction industry is surging in 2017. This is evident by the number of cranes you likely see on your commute to work each day. Behind those cranes is a hard to swallow reality about the growth of this industry. The costs associated with construction has risen steadily and doesn’t appear to be turning back. This impacts contractors and consumers alike. For contractors, higher prices for labor and materials means smaller margins. For consumers, the price of building structures continues to climb.
There are a number of reasons behind the rising cost phenomenon. We’ve listed a few below:
On its most basic level, a demand for residential and commercial buildings has driven up the price of materials. This includes demand for materials in emerging countries. Most notably, steel-made products, including nails, has jumped as high 3.8 percent this year. Lumber prices are rising as well. This increase in material prices stretches margins for contractors and could potentially make the industry less profitable.
The much-talked about labor shortage has led to increased labor costs for contractors and construction companies. The Great Recession led many skilled laborers to pursue careers in other industries. Although the demand for residential and commercial construction has reached pre-recession levels, there’s been a shift in how blue collar work is perceived. The current generation of young workers look down on construction work, viewing it as dangerous and unfulfilling. This has left us with an industry where skilled labor comes at a high price.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.