According to sources in the construction industry, increased upward pressure on the cost of construction products will cause a permanent change in prices. Unforeseen site conditions are one of the most common reasons why costs increase during construction. Despite the pre-construction field check, it is possible to discover the state of the site once the works are underway. Sometimes, labor shortages can increase the cost of a project.
While a contractor will factor labor into the offer, there may not be enough workers available for every trade. Like labor, product availability can increase construction costs. When the specified products are not available, your design and construction team will look for alternatives. However, product availability can affect all areas of the project, from structural materials to luminaires.
Occasional changes are expected depending on supply, and the construction contingency should cover these situations. Inflation also contributes to rising costs in the construction industry around the world. In the construction industry, inflation affects the cost of materials, supplies, labor, and equipment. As the cost of these inputs increases, so does the total cost of construction projects. In addition, the cost of transporting goods and materials has increased due to inflationary pressures on fuel prices.
Inflation can also lead to higher interest rates. This can make it more expensive for contractors to borrow money for their projects. Basically, many “small factors” that contribute to costs in the construction industry are increasing due to inflation. This makes a BIG difference in the total cost of the project at the end of the day.
