General Inquiries

Construction Cost Increases from 2016-2020

  • 1.  Construction Cost Increases from 2016-2020

    Posted 12-09-2019 08:30
    This question concerns the Midwest Region.

    If there was a project that was bid in 2016, and will be built in 2020, what factor would you use to get a general idea of the increased cost budget?
    The project is multi-unit residential, very little excavation.  Wood construction. And vertical construction, rather than horizontal construction.

    1 1/2% per year would be 6% overall.
    2% per year would be 8% overall.

    thank you,
    Joe Harper

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    Joseph Harper CPA, CCIFP
    CFO
    Greater Dayton Construction Group
    Beavercreek OH
    (740) 607-1449
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  • 2.  RE: Construction Cost Increases from 2016-2020

    Posted 12-13-2019 15:27
    Hi Joseph,

    This isn't an answer to your question but many construction companies we work with have found benefits from having their fixed costs analyzed and reduced without any fees or costs. If you have an interest let me know.

    "We help companies cut costs at the corporate level without changing your current vendors. We do this at no cost to you as our fees come out of the savings we find, so you never have to budget for our service." - Mobilia Consulting LLC



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    Donovan Lashley
    CEO
    Mobilia Consulting
    Charleston SC
    (843) 800-7377
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  • 3.  RE: Construction Cost Increases from 2016-2020

    Posted 12-14-2019 09:11
    Unless you have a lock or built in escalation price on your materials this would be very difficult to answer. From a labor standpoint I think the 2% per year would be close as we have seen pretty consistent wage growth of about 3% the past two years and around 1%-2% in the previous two years.

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    Tom Lowrey CPA C F O
    Scott Bridge Company, Inc.
    Opelika AL
    (334) 749-5045
    tlowrey@scottbridge.com
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  • 4.  RE: Construction Cost Increases from 2016-2020

    Posted 12-16-2019 08:17
    Thank you Tom.
    There are no escalations clauses - this is an semi-internal contract for development.

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    Joseph Harper CPA, CCIFP
    CFO
    Greater Dayton Construction Group
    Beavercreek OH
    (740) 607-1449
    ------------------------------