Owners, Don't Wait! Get Your Design Projects Shovel-ready Now
Construction industry leaders who are looking beyond COVID-19 foresee a strong bidding climate ahead followed by a period of shortages and cost premiums. They advise owners not to delay design projects today, but to instead get projects ready for construction before costs increase. Page Principal and Healthcare market sector expert Kurt Neubek explains:
Vermeulens, a North American construction estimating and cost control firm that specializes in forecasting construction cost trends, has been hosting weekly “COVID-19 Construction Round Table” video calls. They primarily feature updates on what construction managers, contractors, subcontractors, suppliers and Vermeulens representatives are seeing each week in the construction industry across the country. The invited audience includes owner representatives from universities, government agencies, and private industry, along with architects, engineers, and other industry professionals.
Weekly Reports From the Field
I attended the last two calls, and each was a real-time exchange of information between industry leaders. The speakers reported first-hand accounts from the field during a global crisis, doing their best to share what they are seeing and learning during an evolving situation.
Much of each call was filled with good news of people overcoming adversity, of the supply chain keeping up with demand, and the triumph of the construction industry’s gritty can-do attitude. At other times, the gravity of the pandemic was more apparent, when people shared cautionary tales such as fearful workers demanding facemasks or staying home, caring for workers who tested positive for COVID-19, shortages of supplies coming from various countries, premium costs to ship materials, and a reduction in the expected volume of work.
Outlook for Design and Construction
The Friday, April 10, 2020 Central/West call featured a discussion on the outlook for construction costs. The following sentiment was jointly expressed by Richard Vermeulen, Co-CEO and Lead Economist at Vermeulens; Blair Tennant, Construction Economist with Vermeulens and host of the call; and Stephen Skabla, Preconstruction Director at Vaughn Construction:
“We are advising owners not to delay design projects. Get through the design process now so your projects are shovel-ready."
Projects that are ready to bid when the world gets back to its new normal will benefit from lower construction costs. Because many projects have recently been put on hold, once those projects restart and hit the market, the surge of work is expected to cause shortages of people and products, leading to higher costs and longer lead times.
The difference in total construction costs between shovel-ready projects and those that wait could be significant. These industry forecasters advocate that a relatively small investment in design today can yield significant returns in construction savings tomorrow.
Kurt Neubek FAIA, LEED AP, EDAC