This article originally appeared on the Birmingham Business Journal.
Growth in construction is forecasted over the next sixth months with confidence in staffing, profit margin and sales expectations all remaining high.
That’s according to Associated Builders & Contractors data for December 2022, as reported in Hoar Construction’s December Cost Trend Report.
Robins & Morton Commercial Division Manager David Green told the BBJ that as far as what changes are expected to take place in the near future, “we are certainly moving into a new era,” and despite looming conversations about the health of commercial construction and questions surrounding the future of brick-and-mortar space, there are still significant numbers of incoming requests for proposals for adaptive re-use, hotels, mixed-use retail with multifamily and office space, which also reflects national trends.
Inflation eased up on construction costs over the past few months, according to the ABC, when lumber and metal products generally trended downward, but remained 10% to 85% pricier than in late 2020. According to the cost trend report, lumber futures have returned to pre-Covid levels with big-box home improvement retailers also starting to reflect these price changes.
Meanwhile, although metals pricing has recently shown a decrease, over the past month, future pricing for common metals seems to be trending upward again.
“Electrical and mechanical equipment, as well as structural steel and metal decking, have been somewhat higher than previous years. However, knowing these items are essential to many of our construction projects helps us estimate and budget because they’re a requirement,” Green said.
Robins & Morton uses Target Value Delivery to further help budget and deal with the offset of cost changes by relying on projection data, relationships and collaboration with all parties involved in the earliest stages of a project to navigate through current market conditions.
The firm transformed the use of what is now Hoffman Media’s HQ and was able to save more than 10% of the total project budget by working alongside Williams Blackstock Architects and the media group.
“When there’s more than a transactional relationship among all team members, there’s trust and a greater opportunity to collaborate when you run into cost issues,” Green said.
According to the U.S. Census Bureau’s Construction Spending November 2022 report, overall U.S. construction spending continues at an all-time high at just over $1.8 trillion per year, despite inflationary obstacles.
And while some businesses are grappling with rents on top of improvements costs, according to Green, the downtown Birmingham area continues to see historic renovations and businesses reinvesting in the market.
