Building material costs are on the rise affecting the construction industry

by | Sep 20, 2021

Building material costs

The construction industry depends in many ways on other collaborative sectors such as suppliers of materials not only for construction but also for decoration.

The Covid-19 pandemic has affected all sectors to different degrees, but – without a doubt – construction has been hit hard by the economic factors that have emerged as a result of this global crisis.

The prolonged closures of industries, the inability to sell, among other factors, have made many suppliers unable to distribute to the local market, which causes the prices of materials to fluctuate and consequently increase at great speed.

The law of supply and demand is no secret to anyone, and when we talk about construction projects that also have to comply with strict delivery dates, it becomes difficult to meet the objectives according to plan, when the cost structure cannot be maintained from start to finish, greatly affecting the final cost scheme of the project.

At the beginning of every project, a budget is established based on its costs, taking into account materials, labor, permits, hours of work, among others. Therefore, if any of these steps are affected and changed, the entire chain will be affected equally.

That is why the increase in material prices directly affects any construction project since determining margins is almost impossible when there is no stability in the rest of the factors that help determine the price of a project.

 

Building material costs are on the rise affecting the construction industry

 

This is a fact, so the question is what should companies do?

First of all, at Carolina Custom Homes we always try to explain to our team the importance of being aware of the situation and make them know that it is global conditions against which we can hardly fight.

Second, have flexibility when making plans and projects, making it clear to clients that there may be changes in the middle of their development, given the instability in the prices of materials and other construction supplies.

This timely information allows us to consolidate ourselves as a team that works to achieve a common goal.

It is also important to establish trusting relationships with suppliers throughout the value chain so that there can be open communication at all times and mutual cooperation to achieve feasible and successful projects for both builders and customers.

 

Some recommendations for customers

 

At Carolina Custom Homes we strongly believe in having transparent communication with our customers.

And, since price fluctuations in materials do not depend directly on us as a company, we always recommend that our clients take into account the factors that can affect the final cost of a project, as well as differentiate what they correspond to understand what some depend on other providers and sectors different from ours.

In this way we make sure to present sustainable, flexible, and open projects, having our clients as allies throughout the process, making them part of what we do, while we assure to deliver what they are expecting from us as a company.

Mike Goubran

Mike Goubran

Mike Goubran, owner of Carolina Development and Properties, LLC, and its affiliate, Carolina Custom Homes and Renovations, LLC, has been building homes in the Charlotte area for over 20 years. Mike graduated with a degree in Construction Management from East Carolina University and went on to receive a Master of Business Administration from Queens University in Charlotte. He has been a Licensed General Contractor since 1999 and currently holds this designation in both North and South Carolina. Mike is also a Certified Green Professional and is a member of the National Association of Home Builders. Carolina Custom Homes and Renovations is also an Accredited Business with the Better Business Bureau.

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