WHAT AFFECTS THE COST
Global Economics
The Cost of Construction is often affected by global economics.
Some examples are outlined here:
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Trumps trade war with China has resulted in tariffs on US timber into China. And this had a knock-on effect on timber prices globally because the Chinese are buying timber from sources that we usually use. Coillte Irish forests are under pressure too. We are currently in a timber shortage, and so it has become expensive.
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In 2004 there was a steel shortage globally, which drove the cost up. On a project I was running, the QS suggest delaying the project to redesign the building structure to be a concrete frame, rather than a steel frame, which the client chose to do. Time was sacrificed for cost savings.
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Brexit caused many UK building suppliers to stockhold, and this lead to increased costs of these items.
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The 2008 global recession caused mass emigration, as we all know. Previous recessions and their bounce backs had a shorter time between them. This last one had at least ten years before the banks started to lend freely again and the construction industry became buoyant again. But by this time the carpenters and block layers who had left for Australia, etc, had gotten married or had children in school. It was much more difficult for them to come home. So we still have the staff shortage, and this drives cost up.
Asking designers for reduced rates only allows them to spend less time on your project. You can compare different designers by asking for a broken down list of deliverables, and then compare.
Haggling with a builder would not result in a lower Cost of Construction, just lower profit margins for the builder or his sub-contractors. Tendering is the proper way to get a “best price”. We will jump into detail on that later.
Renovation Crash Course
Module 3 - Topic 1
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