Learn how building material cost increases have led to a spike in construction costs.
Recently, the rising cost of building materials has driven up the cost of commercial construction in the Bay Area by as much as 10%. This trend is a concern for all contractors who are already dealing with the effects of industry-wide labor shortages. According to the Associated General Contractors of America, the industry has seen significant increases in the cost of metals, lumber, plywood, ready-mixed concrete, asphalt paving materials, and roofing materials.
So, what exactly do these increases mean for contractors? Well, as the cost of building materials continues to increase, it outpaces the increases seen in project prices. This means that contractors have lower profit margins than they experienced prior to the jump in building material costs. In order to remain profitable, contractors will have no choice but to increase the price that they charge customers.
To make matters worse, the cost of building materials is only projected to increase in the coming months. New federal tariffs could increase the cost of building materials such as steel, lumber, and aluminum. As it stands, contractors will have to increase the prices that they charge their clients to address these rising construction costs. The high cost of construction materials could have widespread and lasting effects on the entire construction industry.
This is how the increasing cost of building materials is affecting commercial construction in the Bay Area. Interested in learning more about commercial construction or looking for assistance with your next building project? Then turn to the experts at Proforma Construction. Serving Pleasanton and the surrounding California area, our highly-trained team is ready to make your commercial construction dreams a reality. Contact us to get started today.