Thoughts That Build​ – Rising Costs of Construction….

I want to share with you today some of the things and trends that have been happening within the construction industry now. In the past, I have spoken about the need for accurate pricing to make sure the drawings are covered, make sure you get pricing from your suppliers and subcontractors, but what’s been happening now during the pandemic has been what’s the right word it has been strange and uncertain. Costs of materials have been rising exponentially. The same costs as last year at this time compared to this year has gone up 20%, 30%, 40% up. Just in a supply price we’re talking about global supply chain shortages. That’s the first thing because of the pandemic factor in some of the issues that have happened down south in Texas. With their power outages, a lot of suppliers that we’ve had are based in Texas and we’ve had increases from two weeks to eight weeks to supply materials, just due to backlogs of orders. How do we overcome these hurdles? How do we make sure that all parties are aware? I feel like every day I’m having to explain to my clients to architects about delays in supplies of materials. Projects are stagnating as a result but we have to understand that prices that we held two months ago three months ago are not valid today. There was a time pre-pandemic where construction prices we could say we’re going up five to ten percent at least per year but it’s actually gone exponentially. I started doing some work but the prices even from you know a project I got awarded in November until when I received the actual building permit in march had gone up about 22% up in a span of four months.

Understanding this ensuring your clients are aware, trying to find local products as an example because there’s one thing to do with price, the second thing has to do with the lead time they both factor into the success of a project right you don’t want to make sure that your costs go overboard more stress on your clients, more stress on yourself. But you also want to make sure that you’re getting products in at a good time at a good rate. So that you can keep work going, you can keep seeing that progress as you go down.

So understanding the climate in which we’re in right now and understanding that cost today might not be the same as costs in two weeks is really important. Not just for clients but for contractors, subcontractors, homeowners, architects. In vetting, bill costs for us as GCS have gone up in terms of maintaining a safe workplace. We don’t just have to worry about here in Ontario anyway. You know the ministry guidelines, you know working at heights training but now we have to take into account you know safe work distances, contact tracing we have to keep in mind hand sanitizers that have disappeared from my sites actually.

So there’s a lot of things nowadays that we have to be extra diligent about in our communication, in our delivery to our clients because at the end of the day we’re all in this together. We all want to make sure that the clients are getting the best price and we’re making a little bit of money so understanding the whole size and scope of this is imperative to a successful project.