Rising costs of construction are impacting the residential and non-residential real estate markets and causing firms to reconsider new building construction. Skip to main content


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Rising costs of construction are impacting the residential and non-residential real estate markets and causing firms to reconsider new building construction. The last few years have brought unprecedented changes in the industry, with materials shortages, rapidly rising commodity costs, and continuing labor shortages. Construction costs have been rising steadily for some time. Construction spending has doubled since 2010, however, volume is up only 31%, and jobs in the industry are up only 41%, indicating the serious pressures faced by the industry. And 2022 has brought additional economic pressures with inflation, spurred by rapidly rising energy costs and ongoing shortages of goods worldwide, at its highest in decades, hitting construction costs particularly hard.

Many of the issues causing rapid cost rises in construction stem from the COVID pandemic that brought the supply chain to a near standstill and drove millions of older workers from the workforce, many of whom took early retirement. In addition, the possibility of new waves of COVID around the world and continuing high demand for materials due in particular to destructive weather events, from hurricanes and tornadoes to wildfires and floods, promise no easing in the short term for the high cost of construction.

The High Cost of Construction

Cost and Availability of Materials

man welding on building frame

Non-residential construction costs normally are subject to higher inflation than the Consumer Price Index. Even in normal times, this reflects the worldwide growing demand for commodities such as steel and copper. Recent events have disrupted normal production, delivery, and supply of key commodities, even as demand continues to grow. In addition, recent new tariffs on steel have put added pressure on pricing and created shortages of this key construction material. In addition to increasing building and construction demand, the need for steel is expected to grow even higher as auto production comes back on-line with the return to the availability of semiconductor chips.

Similarly, copper is in high demand for new building construction, rebuilding in disaster zones, and for new electrical grid construction to address aging systems and facilitate the move to greener energy.

Lumber is also under pressure. Demand in the residential market has grown as the housing market surged. In addition, in some regions of the country, massive rebuilding of homes is ongoing in disaster-hit areas. Like steel, tariffs on Canadian lumber have also contributed to large price hikes for that material.

Ongoing Labor Shortages

Skilled labor shortages were an issue before the pandemic, but have become a critical issue in the last few years. Efforts are being made to recruit and train younger workers to replace the skilled older workers who left in droves when the pandemic hit, many of whom have decided to retire rather than return to work. It will take years to rebuild the experienced labor force needed to meet demand in the industry. A lower supply of workers and the rising cost of living has put pressure on wages, which contributes significantly to the higher overall cost of construction.

Supply Chain Disruptions

The material and labor shortages affecting the construction industry are heavily influenced by supply chain disruptions ongoing around the world. With the initial pandemic lockdowns, many firms closed their doors and brought production to a halt. Ports became backed up and backlogs grew out of control. China, a major supplier of both industrial and consumer goods, continues its COVID lockdowns and has not yet returned to full productivity, causing ongoing shortages of materials and components needed in the construction industry. Like construction, the transportation industry faces labor shortages worldwide. The global supply chain disruption will take years to sort out, and meanwhile is contributing to ongoing shortages, delays, and backlogs, as well as skyrocketing prices for goods like steel, copper, and lumber that are in high demand and short supply.

Uncertain Times

Back view of young businessman standing in modern meeting room interior with reflections on table, chairs and panoramic window with sky clouds view and daylight

The speed of world events, rising interest rates, and the possibility of economic recession have made it difficult for business management to make decisions on large investments such as factory expansions and new building construction. The current climate is one that many find calls for caution in the short term to allow the global situation to sort itself out and the economy to stabilize as it recovers from the recent disruptions caused by the COVID pandemic. In the meantime, business leaders must find solutions to immediate needs for capacity in order to service their customers and optimize their business performance. The need for convenient and quality building space is urgent and ongoing, and businesses need fast and affordable solutions as they sort out their longer-term situations.

Beat the High Cost of Construction with a Tension Fabric Building

Setting up a tension fabric structure

Because of rising costs and economic uncertainty, businesses that have a need for extra building capacity may defer investing in new building projects for the time being. Prefabricated buildings are an alternative to traditional buildings that provide quickly available space at a fraction of the cost of new construction. High-quality and versatile tension fabric buildings can be installed and up and running for just about any use within weeks of order. These structures are modular and extremely durable, aluminum alloy-framed buildings that are as reliable as traditional buildings, holding up to any weather and comfortable in any climate. With a tension fabric building, there is no need to deal with the cost of construction. They can be configured to fit the user’s needs for footprint, openings, and ventilation. They are electrical and HVAC ready and can support overhead truss systems for industrial applications. They don’t require a building foundation and can be installed on pavement, gravel, turf, or even wet or rocky ground, wherever they are needed. These buildings provide fast and easy solutions to meet short or long-term capacity needs in almost any industry.

How Can a Tension Fabric Structure Be Used?

aerial view of tension fabric structure

Tension fabric structures by Allsite are highly versatile. They come in a number of widths and custom lengths based on needs. With a range of anchorage options, doorways, freight, and other openings, these buildings serve a wide range of purposes. They can be used for people, events, warehouse space, repair and maintenance facilities, production lines, or in aviation as hangers, in construction to cover the worksite, or protect materials and equipment from the weather. They are also used as homeless shelters, medical facility expansion spaces and in disaster zones as headquarters for disaster recovery services. Because they are designed specifically to provide plenty of open, high-clearance space, and also provide comfortable interior space that can be climate-controlled with fans, heaters, or full HVAC systems, they are prized by many of our customers as reliable extensions of their normal operations at a cost that is affordable in times when building costs are steeply rising.

What does it cost?

Tension fabric building installation

Our tension fabric buildings are available for rent, lease, or purchase. They may be used for the short term, as a month-to-month rental, such as events or temporary storage. Monthly rental costs can be as little as $3.50 a square foot for a six-month rental. Or they can be installed for long-term or permanent use, such as a maintenance facility, manufacturing, aircraft hangar, or sports venue. We offer affordable 3-year lease terms. Buildings needed for longer-term use may also be purchased.

View some of our installations on our website applications pages and find more information about our tension fabric structures on our informative FAQ page.

Author Beth Karikari

Beth holds an MBA, Master of Marketing and Bachelor of Business from Griffith University, Australia. Read more about Beth and the rest of our team at https://allsitestructures.com/about/

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