Construction Costs Summary

When fundamental raw materials like steel, concrete and petroleum experience double-digit inflation rates, the amount of time for which material suppliers, subcontractors, general contractors and cost estimators can commit to pricing grows shorter and shorter. Established commercial construction companies like Bob Moore Construction have outstanding relationships with major subcontractors and suppliers, as well as the expertise to provide as much pricing information and commitment as possible. But the fiscal reality of the global economy and the ramifications of natural disasters shackle all participants in the building process when it comes to projecting construction costs, long term. When prices for core raw materials are increasing at eight to ten times the economy's inflation rate, it is very difficult to commit to pricing several months in the future that is still cost-competitive.
Given that the volatility of raw materials and supplies will not be diminished in the near future, developers must seek out ways to compress the construction schedule and work with leading industry partners to increase the legitimacy of their project budget. For example:
· Engaging a general contractor or construction manager earlier in the process is a good way to control time in the initial planning phases, as these experts understand permitting and other legal requirements and can ensure all documentation is filed thoroughly and in a timely manner, reducing schedule delays early on.
· Approaches to construction like tilt-up construction and Fast Track have reduced the timetable for delivering a construction project considerably.
· Some building owners are taking a more active role in the design/bid/build process and are functioning as a team member to streamline communications and drive faster completion of projects as well.
Developers and business owners should leverage these approaches and work with general contractors who have the relationships with quality suppliers to maximize their ability to project and budget construction costs accurately through the end of the building's construction process.