Construction costs regarding steel and lumber are on the rise nationally. So, many are searching for solutions to the problem and modular is considered a fix to help keep construction costs low despite increases. There are other options to consider of course, but one of the solutions is a modular fix. Read below for a larger list of ways builders can save on resources when the price of materials goes up.
According to the Associated Builders and Contractors analysis of the Bureau of Labor Statistics data they report a 73% price rise (January 2020 to January 2021) for softwood lumber. The increase was 3.2% in the same period for fabricated structural metal and a 15.6 increase in iron and steel. Each source for the data you can find differs but, no one can doubt prices are trending up especially for lumber.
The reasons for the increases are varied, but most of the blame resides with, unsurprisingly, Covid. The virus has had a ripple effect on the entire domestics and global economy with tendrils reaching deep into nearly every market. Covid forced furnaces to go cold in the steel industry and the lumber market to misread demand. Not to mention these industries require a hands on production processes. Human contact in facilities was inevitable. This strained and continues to strain the supply chain. Hence prices trend up.
With increased costs a reality, it the falls on the shoulders of the builders to find alternatives to keep costs low. In seminars, conference calls, articles and meetings leaders in the building industry are in search of ways to absorb or cut costs so the rise in materials will not impact bottom line. Here are just a few the thoughts and ideas getting kicked around:
Literal stick-built projects may need to use another material. There are options that are wide-ranging including the use of metal products. Although there is a rise in metal costs it is no where near the rise in cost of lumber overall. Where steel or metal are traditionally used, alternatives can be found. For instance some in the industry are considering using more TPO (thermoplastic polyolefin) roofing where metal panels were the material of choice just months ago.
Materials are a huge cost no doubt, but there are other methods to cut the cost of a project overall. Going completely modular or purchasing some modular components can shrink the manpower and total time needed onsite. As an example because the modular elevator comes installed in a fabricated hoistway, you can take the shaft out build costs completely. A modular elevator comes with a shaft or hoistway. Talk about savings.
General construction costs are lower as well. Regarding the elevator, the total construction time onsite is reduced. Traditional elevators most commonly install at the end of the building project. It can tack on weeks to months of general construction costs! With modular the set of fully installed elevator is usually first step. It takes less than ONE DAY and start up is completed in less than 1 week. So, you tell me…what are the general construction costs for weeks to months? Modular makes sense to save money.
This one is a bit repetitive but, if the project is finished faster, it is more quickly ready for occupancy. When one hotelier commented to me that going modular put a million dollars in his pocket, he wasn’t exaggerating. Can new building practices get you to reaping ROI rewards quicker?
Many builders are rethinking the time period they allow for a quote to remain valid. It is not unusual, depending on the structure, for a quote or bid to have an expiration of 6 months or more. And when deadlines approach they are often waived. When prices for materials are not stable and bounce (especially in an upward direction), it can leave builders holding the bag. Shortening the shelf life of a quote could allow the builder to be more accurate with estimates, thus saving money.
Now is the time to look at the bids and quotes out there on the table. If you have a quote that has matured, but still valid book it before they change their mind. That means with us at MEM! So, lock in lower prices before the prices are changed in the future. It only makes sense. If you have a project that requires an elevator why put it off for prices to possibly increase? That not only applies to elevators. With broad increases expected, now may be the time to set some plans in stone.
The one thing that is absolutely true about the construction industry is that it is resilient. Builders will always find ways to provide an exceptional product at a fair price. Whether a hotel, housing unit, educational facility or commercial property there are solutions!
The invisible hand of economics demands that even the unseen forces like a deadly virus will not stop the building industry or the economy as a whole. Through individual companies big and small, freedom of production and freedom of consumption, the best interest of the market will be fulfilled. The question is, are you willing to embrace some of the new solutions or opportunities getting bandied about?
If you have a project that needs a faster timeline or you have received a quote from us in the past, now is the time to get the package locked in or get new numbers to consider before prices spike. We all know a conventional elevator slows projects down and creates headaches. They also add unforeseen additional costs that are even more damaging to your projects bottom line. Now with MEM elevators you can lock in certainty and do something about material increases. We are modular elevators taking you to a higher level.