When you think about construction, you probably don’t think about how much it costs, unless you’re doing the construction yourself. There’s the equipment, tools, and materials needed, but also land and permits for construction. There are several things that can impact construction costs, both in a good way (lowering the amount of money spent), and in a way that significantly drives up the prices of materials and labor.
Positive Impact: Sustainable Building Materials and Smart Building
The actual materials needed to build a dwelling or other type of structure can get pretty pricey. One way to save on the cost of building materials is to buy locally. Also, low-maintenance materials reduce costs in the long run. Recycled materials are another good way to cut down on building costs, and it’s a great way to go green and create a more sustainable building.
Smart Building to Reduce Costs
The land where the structure is to be built is another thing to take into consideration. You will want the land to appreciate in value, just like you would with a house. Whether you’re an individual working on a small project or a company working on a major project, funding a construction project gets pretty expensive quickly.
Modern technology has also been useful in helping reduce construction costs. Human error does occur in any field, and certain technologies can help reduce that. Adequate planning can ensure an efficient project, and also further eliminate the possibility of errors and sudden changes that result in more costs.
Negative Impact: Shortage of Workers and Resources
There are thousands of construction jobs available in the U.S. alone, but there is also a labor shortage. Because of this, construction firms raise wages and increase the benefits of current construction workers. However, when the cost of labor increases, construction firms will have to charge more for their services due to not having enough qualified workers entering into the construction industry.
Receiving an education in construction actually doesn’t require a four-year degree, except for construction management, in some cases. Usually, the most education needed for a construction worker or general contractor is a two-year Associate degree along with an ample amount of training. Once the degree, certification, and/or license is obtained, workers only need to regularly update their license along with taking courses in continuing education.
Negative Impact: Lack of Resources
Sometimes it is not possible to always use recycled or locally sourced materials, so the only option is to use what is available. When what’s available is limited, this can cause an increase in prices. With materials being unavailable, construction projects can be put on hold, which in turn, can waste resources, money, and time.
Tariffs and trade problems also result in a lack of resources, due to increased costs. Tariff issues have resulted in the prices of petroleum, lumber, and steel to increase. This is why many construction companies are looking to produce and buy these materials domestically.
How Rising Costs Impact Construction Projects
The rising cost of building materials is causing a decrease in home building. Many future homeowners have chosen the option to build their houses from the ground up to have a more customized home to suit their needs and desires, but this has come to a halt due to increased costs.
According to a CNBC article, the increasing cost of construction materials can add over $35,000 to the total cost of a new home. In the past year, lumber prices have increased by 340% due to tariffs.
Using sustainable materials for building has shown good results in keeping construction costs down. This is also known as green building and contrary to what many believe, it doesn’t cost as much as a non-green building when done sufficiently. Also, if more people decide to go into the construction industry, then there won’t be a shortage of workers, and construction costs won’t have to increase.