There has been a significant upward trend in recent years related to building costs for schools. Rising costs are being impacted most by the construction industry, economy, labor force, and price of materials for things like concrete wall forms.
By comparing square foot averages over the last 5 years, there’s been almost a quarter percentage increase in cost per square foot for construction jobs. That’s pretty dramatic and it requires some deeper analysis to fully understand what’s causing higher costs. Here’s some reasons why schools today are so expensive to build.
Labor Costs and Hiring Issues
Educational institutions are experiencing problems with getting bids from contractors, and contractors are having trouble retaining their labor force.
Working in the construction industry is highly competitive and the bounce rate is higher than ever. Employees only work for those who are paying top dollar! Nothing is holding them back from leaving a project in the middle of its construction and going to work for a competitor who’s paying as little as .30 cents more per hour. Construction companies can only entertain and keep workers by offering them higher wages, which means higher costs for school buildings. Competition from the bottom-up almost always yields higher costs.
Another aspect of higher costs is that we’re in a bidder’s market. In previous years, when looking to hire subcontractors, they would line up to fight in price wars for construction projects. Now, schools are lucky if they can get more than 2 people to offer bids on their jobs. The reality is that many contractors are booked and piled up to their elbows in work. This scarcity of contractors implies higher costs and less competitive bids. Lack of competition from the top up is having a similar effect – contractors want to be compensated for picking up new work and their services are in special demand in this economy.
All in all, labor is a big factor in increased school building costs.
Specific Construction Needs for Schools
With more people than ever attending schools and colleges, construction codes and schools’ needs are evolving for buildings. Typically, the lifespans of these buildings need to last longer than normal commercial buildings, so construction codes are more intense than other building types. Also, modern designs for sleek buildings and bigger gymnasiums rack up costs. There’s an emphasis more than ever on the ‘student’ experience, and schools are having to give their buildings a facelift to keep up with modern designs.
Simple things like air conditioning, plumbing, and lighting are also more costly. Rising needs for better ventilation and remodels for bathrooms are making schools sticker prices go up. Besides just the student experience, newer designs are being implemented for safety and security. For example, wing walls are designed differently for defense again school shooters. These advances have associated new costs that older schools did not need to worry about in previous years.
Economic Factors and Materiel Costs
The economy has only been on an upward trend since 2012, and that’s why there is a demand for more schools to be built. Being a contractor puts you in a great position with so much demand, so you can afford to increase your rate to keep up with industries, materials, and other associated costs.
Naturally, this economic growth has trickled into every industry: the steel, wood, and concrete industries are in greater demand and supplies are costing more and more. All of these things affect the price of school buildings. And when you total all these costs, this what explains a quarter percentage increase per cost per square foot.
Forming America Can Help Your Next Project
It’s important to stay up to speed on cost matters in the construction industry so you can accurately bid and plan your next project. Also remember that you can count on Forming America for all your supply needs. We are in the business of helping contractors succeed on their construction projects. Contact us today!