While portions of the construction industry are starting to see some relief due to the end to pandemic-related restrictions and immediate solutions to port delays and trucker shortages; protracted supply chain issues, skyrocketing inflation, and geopolitical tensions globally indicate another challenging year in 2022. In this issue, we explore the current issues facing our National Healthcare Team, transportation, economics, and the geopolitical forefront and offer solutions to mitigating these impacts on construction.
Sam OโConnor, Preconstruction Director โ National Healthcare, describes what his team is doing to guide clients through the current staggering escalation. His clients are asking the same three questions consistently: How much does this project cost today; How much is it tomorrow; What can we do to keep moving forward?
“Current trends have increased construction costs at a scale of 1%+ per month, which is the rate we have been advising our clients to expect for additional funding as we chart construction costs over the projectโs life cycle. This rate is historically high as ANNUAL escalation over the previous 10 years was a steady 2-3% per YEAR.”
With price escalations even higher than those following the great financial crisis over a decade ago, now more than ever, we are navigating uncharted waters. While hopeful that prices will soon reach an inflection point and will retreat as more production comes online, supply chains are reconnected, and inventory levels are replenished, the timing of such downward pressure remains contingent on the end of the public health crisis along with a normalization of supply and demand.
