Customers and general contractors alike have noticed an increase in construction costs. Whether building a home or a commercial site, rising prices are having an impact on the bottom line.
President Trump’s recently imposed trade tariffs on steel and aluminum paired with a skilled labor shortage in South Florida are worsening the effects. In March of 2018, the administration imposed a 25 percent tariff on steel and 10 percent tariff on aluminum imported from Canada, Mexico and Europe with an increasing trade war between the U.S. and China well underway.
For South Florida residents and investors in commercial construction, the effects are real. Already by late spring 2018, builders were seeing a 10 percent increase in the price of steel. Lumber prices are also at a historic high.
Like many places in the country, the South Florida construction sector is also facing a labor shortage, which is driving up wages and further contributing to rising construction costs. Labor department data suggests that the demand for masonry workers will grow by 15 percent between 2014 and 2024. Electrician demand is projected to grow 14 percent, roofer demand to grow by 13 percent, and plumbers by 12 percent.
Supply and demand
It comes as no surprise then that increasing demand for new construction coupled with shrinking supply of labor and more expensive materials means the burden of cost is increasing across the board. How exactly that burden will shift will likely depend on the project, scope and location.
Despite rising prices, South Florida continues to be a strong investment location. If you’re looking for a general contractor who provides on-time and on-budget builds with no financial surprises, get in touch today to schedule consultation.
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