Category: Construction Loan Monitoring

Endangered Species, Delayed Projects: How Moran Consultants Helps Navigate Compliance Risks

Posted on by Chelsea Clifton

When it comes to planning and developing a new project in Florida, one of the most easily overlooked—but potentially project-halting—issues is the presence of endangered wildlife. Two protected species in particular, the Gopher Tortoise and the Eastern Indigo Snake, are frequently found on undeveloped or partially disturbed land throughout the Southeast. Their discovery on a job site can introduce unexpected layers of regulatory complexity, permit delays, and even construction shutdowns.

These animals aren’t just protected because of their rarity. The Gopher Tortoise is considered a keystone species, supporting an entire ecosystem through its burrowing behavior. The Eastern Indigo Snake, a federally threatened species, often takes refuge in these burrows. Because of their environmental importance, both species are closely monitored by state and federal agencies, and disturbing them—intentionally or unintentionally—can come with serious consequences.

For developers and project stakeholders, this translates to risk: timelines can be extended by months, relocation permits may be required, and oversight by agencies like the Florida Fish and Wildlife Conservation Commission (FWC) and the U.S. Fish and Wildlife Service (USFWS) becomes unavoidable.

That’s where Moran Consultants comes in.

Phase I ESA

Our Due Diligence team specializes in identifying potential environmental risks before they become costly obstacles. By conducting a Phase I Environmental Site Assessment early in the acquisition or pre-construction process, we can help determine whether your site may contain suitable habitat for endangered species, well before crews or equipment arrive.

Construction Loan Monitoring

Working with a regional-specific consultant from Moran Consultants ensures that lenders, syndicators, and investors are supported by professionals who understand the unique environmental challenges in each market. Our consultants are familiar with common risks, enabling them to provide timely insights and strategic guidance from day one. That level of foresight can be the difference between staying on schedule or facing costly delays.

Don’t let an endangered species bring your project to a standstill. Contact Moran Consultants to learn how our team can help you stay ahead of environmental compliance and keep your timeline intact.

Top Risk Mitigation Practices in Construction: How Pandemic Lessons Still Apply

Posted on by Chelsea Clifton

Disruptions caused by the COVID-19 pandemic affected nearly every industry, but its impact to the construction sector was particularly abrasive. Players in the real estate industry were forced to quickly adapt to offset the unfamiliar challenges, ranging from supply chain disruptions to labor shortages and fluctuating material prices. Firms merged proven practices with new tactics to effectively manage risks and keep projects on course. Despite the industry’s gradual recovery, lessons learned during the pandemic remain relevant in the face of persistent inflation, looming tariffs, and ongoing uncertainties.

Here’s how the top risk mitigation practices born from the pandemic continue to lead the way in today’s unpredictable construction landscape:

  1. Confirming Construction Contract Bids and Subcontractor Engagement

A key lesson learned during the pandemic was the need to establish well-substantiated bids early in the process. As inflation and looming tariffs continue to affect material and labor costs, it is more critical than ever to confirm a high percentage (70% – 80%) of the construction contract is bid out upfront and backed by true market pricing. This approach secures most of the project’s cost framework, reducing exposure to unexpected price increases later.

Equally important is the verification of which key subcontracts remain to be bid out. As seen during the pandemic, bidding out all essential trades prior to project closure minimizes risks from last-minute cost adjustments or material procurement issues—challenges likely to be amplified due to ongoing supply chain disruptions and reduced subcontractor availability.

  1. Anticipating Additional Costs and Early Procurement Strategies

Throughout the pandemic, contractors experienced the volatility of material and equipment costs during uncertain times. Due to persistent inflation and looming tariffs, it is essential that contractors proactively prepare for any known or anticipated cost increases for materials and equipment, especially for large cost items such as steel, lumber, and electrical components (e.g., switchgear, transformers, panels, etc.)

In response, contractors are employing several mitigation strategies, such as early material procurement, utilizing multiple suppliers and vendors to ensure alternative options, and establishing rapport with subcontractors. Implementing such methods assists in reducing price escalations and sudden material availability issues.

  1. Navigating Supply Chain Disruptions and Material Shortages

The pandemic exposed just how vulnerable global supply chains are to disruption. Materials and equipment that were once readily available became scarce or delayed, wreaking havoc on project timelines and budgets. Today, these risks remain as real as ever, with potential tariffs adding yet another layer of complexity.

To navigate around such disruptions, construction companies began to verify that general contractors have appropriate agreements with suppliers, including alternative sourcing options, to ensure that disruptions would not inhibit a project’s progression.

Advance procurement strategies, such as pre-ordering critical materials or negotiating long-term supply contracts, provide a layer of financial and logistical protection. Such agreements help stabilize costs and ensure timely material availability, minimizing risks caused by market fluctuations or tariff-related price surges.

  1. Managing Reduced Subcontractor Availability and Labor Shortages

Labor shortages were a significant challenge during the pandemic, with many construction firms still being affected by reduced availability of subcontractors and skilled workers. Planning for such shortages was accomplished through early securement of labor contracts or diversification of the workforce through in-house teams and external subcontractors.

To prevent project delays caused by workforce shortages, contractors must monitor labor availability and ensure that subcontractor agreements are in place well before project initiation. By understanding these risks early, companies can create contingency plans that avoid project slowdowns and mitigate potential schedule delays.

  1. Standardizing Owner/GC Contracts to Mitigate Risks

One of the key risk management strategies that emerged as a result of the pandemic was to ensure that contracts were standardized and contained provisions to protect both owners and general contractors from unpredictable factors.

Contracts should incorporate key stipulations to enhance clarity and minimize disputes amid unexpected changes. These include price escalation clauses to adjust for rising material costs, force majeure and delay provisions to shield against unforeseen disruptions, liquidated damages clauses to establish penalties for delays, and shared savings provisions to incentivize staying under budget. Such terms ensure mutual clarity for each party and reduce conflict risks when conditions shift.

Conclusion: Adapting COVID-Era Strategies for Current Challenges

The construction industry’s response to the COVID-19 pandemic has left a lasting blueprint for resilience. As firms navigate today’s landscape of inflation, potential tariffs, and lingering uncertainties, the risk mitigation strategies honed during that crisis—early bid confirmation, proactive procurement, robust supply chain management, labor planning, and standardized contracts—remain indispensable. By embedding these practices into their operations, industry players can not only weather current challenges but also build a stronger foundation for the future.

How New U.S. Steel & Aluminum Tariffs Could Reshape Construction & Real Estate

Posted on by Chelsea Clifton

President Trump has reinstated tariffs on steel and aluminum imports, imposing a 25% tax on steel and 25% on aluminum, eliminating all exemptions. While the goal is to strengthen domestic metal production, these tariffs are expected to raise costs and disrupt supply chains, particularly in construction and real estate.

For developers, contractors, and investors, this shift could mean higher prices, longer project timelines, and increased financial pressure. Understanding how these changes may impact the industry is crucial for staying ahead.

Rising Costs and Supply Chain Disruptions

Steel and aluminum are essential materials in construction, from structural frameworks to mechanical systems. With imports now taxed more heavily, material prices are expected to rise, putting pressure on project budgets. According to the U.S. Census Bureau and International Trade Administration, the U.S. imported 25.6 million metric tons of steel and 5.4 million metric tons of aluminum in 2024, with major suppliers including Canada, Mexico, and Brazil.

The elimination of exemptions means that even long-standing trade partners will face higher costs, potentially leading to supply shortages and price hikes. If domestic production cannot meet demand, construction firms may experience delays, increased costs, and contract renegotiations—challenges that could slow the pace of real estate development nationwide.

Passing Along the Cost

Higher steel and aluminum costs will likely increase overall construction expenses, with contractors passing those costs onto project owners and consumers through higher bids. Rising material prices could also cause potential delays as developers assess additional economic challenges like high interest rates and labor shortages.

What Developers, Contractors, and Investors Should Do

With material prices expected to rise, developers and contractors must act now to prepare for potential cost increases. Reevaluating project budgets, renegotiating contracts, and securing supply agreements early could help lock in pricing before tariffs fully take effect.

Additionally, staying informed about trade policy developments is crucial. Trump has hinted at additional tariffs on semiconductors, cars, and pharmaceuticals, which could create further economic ripple effects.

At Moran Consultants, we specialize in helping clients navigate market shifts, manage costs, and strategize for long-term project success. If you’re concerned about how these tariffs could impact your development, let’s start a conversation today. Now is the time to prepare for what’s ahead.

CONTACT US

California Wildfires Impact on Supply Chains and Construction Timelines

Posted on by Chelsea Clifton

The recent Southern California wildfires have caused unprecedented devastation, claiming 25 lives, displacing tens of thousands, and inflicting $250-$275 billion in damages, making it the most expensive wildfire in U.S. history. While federal funding will cover 100% of disaster response costs for 180 days, rebuilding efforts face challenges from hazardous fire debris, which contains toxic materials like asbestos and heavy metals. Los Angeles County has prohibited debris removal in critical areas until inspections ensure safety, adding delays to reconstruction timelines.

Below, we’ll explore what’s ahead for businesses involved in construction, supply chain management, and disaster recovery—and how you can prepare to navigate the changing landscape.

How the California Wildfires Will Disrupt Supply Chains

  1. Material Shortages

The surge in reconstruction projects will drive unprecedented demand for building materials such as lumber, concrete, steel, and other essentials. Suppliers, many of whom are still recovering from global disruptions caused by the pandemic, are unlikely to meet this increased demand without delays.

  1. Rising Costs of Materials and Labor

Higher demand for both materials and labor will lead to price spikes. Contractors specializing in hazard mitigation or electrical grid restoration will possibly face rising costs due to hazard pay and worker per diems. This will create a ripple effect, increasing expenses across all reconstruction projects.

  1. Logistical Challenges

Damage to local infrastructure, including roads and utility systems, will hinder the transportation and delivery of materials to affected areas. Delays in material shipments could stretch project timelines even further, forcing developers and contractors to re-evaluate schedules and budgets.

Implications for Construction Timelines

  1. Resource Competition

Rebuilding efforts will prioritize homes, schools, and critical infrastructure, leaving fewer resources and skilled workers available for commercial and non-critical projects. This increased competition will put immense pressure on local contractors and labor markets.

  1. Delayed Project Schedules

Extended lead times for securing materials and labor, coupled with logistical challenges, will push project schedules out further. Contractors may also face permitting and inspection delays as local governments grapple with processing an overwhelming volume of projects.

  1.  Required Assessments in LA County

Los Angeles County Health Officer Dr. Muntu Davis has prohibited the cleanup or removal of fire debris in critical fire areas, including Pacific Palisades and Altadena, until a thorough hazardous materials inspection has been completed. Fire debris—contaminated with asbestos, heavy metals, and other toxic substances—poses serious risks to public health if mishandled. These inspections, which are part of a two-phase cleanup process, add a critical layer to recovery efforts, ensuring safety but also extending timelines for reconstruction.

Recommendations for Businesses

To successfully navigate the challenges posed by the Southern California wildfires, businesses need to adopt proactive strategies and prepare for evolving conditions.

  1. Start Early

Begin project planning and bidding processes as soon as possible to secure essential resources. Early preparation will help you lock in materials and labor before prices increase.

  1. Diversify Supplier Relationships

Establishing partnerships with multiple suppliers can help mitigate risks associated with material shortages or delays. Diversifying your supply chain network is critical in a highly competitive market.

  1. Plan for Higher Costs

Account for rising material and labor costs by building contingency funds into your project budgets. Factoring in cost increases early will help you avoid financial surprises down the line.

  1. Stay Informed

Monitor FEMA announcements, material market trends, and updates on recovery efforts. Staying informed will allow you to adjust your strategies and timelines as needed.

How Moran Consultants Can Help

At Moran Consultants, we recognize the unique challenges presented by disasters like the Southern California wildfires. Our comprehensive Due Diligence services are tailored to thoroughly assess the full scope of damage, including the evaluation of building rehabilitation needs, environmental risks, structural integrity, and potential contamination. By providing a detailed, data-driven analysis, we help ensure that you have the information needed to make informed decisions and navigate the recovery process with confidence. Whether your property requires targeted repairs, extensive renovations, or a complete rebuild, we guide you every step of the way to develop a clear and actionable recovery strategy.

Our Construction Loan Monitoring division plays a critical role in overseeing the entire reconstruction process. From budgeting and financial monitoring to ensuring compliance with timelines, we help navigate challenges such as supply chain disruptions and construction delays. Our proactive oversight helps mitigate risks and keeps your project on track to deliver results efficiently and cost-effectively.

In addition, through our Owner’s Representation services, we act as a trusted partner, advocating on your behalf throughout the recovery process. We offer strategic guidance, coordinate between stakeholders, and ensure your project aligns with financial, regulatory, and safety standards, giving you confidence and control over the rebuilding efforts.

CONTACT US

 

Dallas-Fort Worth: A Hub of Construction Growth and Opportunity

Posted on by Chelsea Clifton

The Dallas-Fort Worth (DFW) metroplex has been a beacon of construction growth and development in recent years. With the skyline peppered with construction cranes, it’s evident that the area is booming. As development continues to expand, it’s critical to ensure projects meet due diligence standards and protect owners through comprehensive representation. At Moran Consultants, we deliver end-to-end services that ensure project success from every angle.

Record-Breaking Construction Job Growth

According to a recent report from the Associated General Contractors, the Dallas area saw the most significant construction job growth in the United States last year. In 2023, the Dallas area added a staggering 12,300 building sector jobs, marking an 8% year-over-year increase. This surge in employment outpaced all other U.S. metro areas. On the Fort Worth side of the metroplex, an additional 2,500 construction jobs were created, further solidifying the region’s position as a leader in construction employment.

Major Construction Projects Driving Growth

Several large-scale construction projects commenced in 2023, contributing significantly to the job growth in Dallas-Fort Worth. Notably, ground was broken for the $500 million, 850,000-square-foot Wells Fargo regional office campus in Irving. Additionally, just north of downtown Dallas, work began on Goldman Sachs’ massive office complex. These projects are emblematic of the broader trend of office space and apartment construction that Dallas-Fort Worth leads in the country. These ambitious projects underscore the importance of robust construction loan monitoring and risk mitigation services to ensure timely delivery and mitigate financial risks.

Future of Construction in Dallas-Fort Worth: Growth Opportunities and Risk Mitigation Needs

As we move forward, the construction boom in Dallas-Fort Worth shows no signs of slowing down. The region’s ability to attract and retain a skilled workforce, coupled with its robust pipeline of major projects, positions it as a key player in the national construction landscape.

At Moran Consultants, we are proud to be part of this dynamic and rapidly evolving market. Our projects, including the Meadowbrook Apartment complex, East Foster Crossing multi-family apartment complex, The Sinclair Hotel, The National Thompson Hotel, and The Mayflower exemplify our commitment to contributing to the region’s growth and development.

With the opening of our new location in the Dallas-Fort Worth Metroplex, Moran Consultants is well-positioned to continue supporting the thriving construction industry. We look forward to participating in the region’s ongoing growth, delivering high-quality construction risk mitigation services that meet the needs of our clients and the DFW community.

Moran Provides Expertise in Construction Loan Monitoring, Due Diligence, and Owner’s Representation

At Moran Consultants, we offer a comprehensive range of services tailored to meet the needs of your project at every phase. With our Construction Loan Monitoring services, we facilitate risk management with an emphasis on communication, teamwork, and utilization of expertise throughout the underwriting and construction process. Focusing on project time, quality, and cost, we contribute to successful project outcomes.

Through our Due Diligence services, we provide critical insights and comprehensive assessments to serve as a foundation for decisive decision-making. Additionally, our Owner’s Representation services guarantee that your interests are protected throughout the construction process, from inception to completion, ensuring projects are delivered on time, within budget, and according to specifications. These services make us a trusted partner in ensuring the success of your construction project. No matter what your needs may be, our company strives to create a personalized service that is hand-crafted to meet your standards. Give us a call at 866-545-3350 or contact us online to see how we can help you on your next project.

Important Regulatory Updates: Energy Star Ratings and R-410a Refrigerant

Posted on by Chelsea Clifton

In light of forthcoming regulatory changes, industry professionals must stay informed about updates that impact project specifications and compliance. Two significant updates: new requirements for Energy Star window and door certification and the upcoming ban on R-410a refrigerant in HVAC systems. Understanding these changes will help ensure that projects remain compliant and avoid potential disruptions.

Energy Star Window and Door Certification

Effective October 23, 2023, the US Environmental Protection Agency (EPA) has updated the requirements for Energy Star certification for windows and doors. This change could mean that many windows and doors currently specified in projects might no longer meet the updated Energy Star standards. It is important to verify that developers, designers, and contractors are aware of these new requirements to ensure compliance. Detailed information about the revised standards can be found here.

 

R-410a Refrigerant Phase-Out

R-410a refrigerant has been a staple for cooling homes and buildings for many years. However, its high hydrofluorocarbon (HFC) content poses a significant threat to the planet’s protective ozone layer. With the growing concern for the environment, the American Innovation & Manufacturing (AIM) Act was enacted, empowering the Environmental Protection Agency (EPA) to set stricter HFC standards. Following this, the EPA released a detailed plan in September 2021 to reduce HFC consumption significantly from 2022 through 2036.

Effective January 2025, the AIM Act will ban the use of R-410a refrigerant in HVAC systems across the United States. This ban coincides with new SEER2 requirements, which will raise energy efficiency standards for HVAC equipment manufactured from 2025 onward.

As R-410a is phased out, it is anticipated that new HVAC systems will include sensors and other mechanisms to detect the presence of R-410a refrigerant and prevent their operation, ensuring adherence to the new regulations. Currently, replacement equipment for systems using R-410a is not widely available. While an extension of this deadline is possible, there is no current indication from the EPA that this will happen.

 

How Moran Consultants Can Help

Moran Consultants is here to support your construction projects in navigating these new regulatory landscapes. With the help of our experienced team of in-house consultants, you can confidently address these new standards, avoid potential disruptions, and ensure the successful completion of your projects. Stay informed, stay compliant, and let us help you meet these challenges head-on.

The Power of a Construction Consultant in Streamlining Communication

Posted on by Chelsea Clifton

With numerous stakeholders, complex processes, and the potential for miscommunication, the construction industry often faces challenges that can impact project timelines and outcomes. This is precisely where the power of construction consulting comes into play, acting as a catalyst for streamlined communication to ensure a successful project outcome.

 

What is a Construction Consultant?

A construction consultant offers strategic expertise and insight to optimize various aspects of a construction project. One of the fundamental features addressed by an experienced consultant is communication. The ability to convey information accurately and efficiently throughout the project lifecycle is fundamental for mitigating risks and ensuring timely completion. By identifying potential communication challenges early, consultants can develop proactive strategies to address these challenges before they escalate. This foresight minimizes the likelihood of misunderstandings and breakdowns in communication, fostering a more efficient project environment.

 

The Benefits of a Construction Consultant

Beyond the immediate strategies for communication improvement, construction consulting firms offer numerous long-term benefits. Projects under their guidance experience enhanced efficiency and have the potential for a project to remain on time and within budget. Here are several reasons how they contribute to enhanced communication:

Clear Project Goals and Objectives: Consultants work to establish clear and concise project goals and objectives. This clarity serves as a roadmap for the entire project team, reducing the likelihood of misunderstandings and promoting a unified understanding of the project’s needs.

Regular Project Updates: Consultants facilitate regular project updates to keep all stakeholders informed about the project’s progress through effective communication. This helps prevent surprises and allows for timely adjustments as needed.

Proactive Risk Assessment: Construction consultants are adept at identifying potential challenges early in the project planning phase. By conducting thorough risk assessments, they can anticipate issues that may arise and develop proactive strategies to address and mitigate these challenges.

Documentation and Reporting: Consultants ensure thorough documentation and reporting of project-related activities. This includes monthly progress reports and any other relevant information, providing a comprehensive record that aids in decision-making and accountability.

 

Why Choose Moran Consultants

Moran Consultants offers a specialized and efficient solution for effective communication through our construction loan monitoring service. Our team of consultants has the expertise to minimize risks, ensure stakeholder alignment, and provide transparent reporting crucial for successful project financing. With adaptive communication strategies and a commitment to efficiency, Moran Consultants have become invaluable partners in navigating the complex landscape of construction financing. With over 250 years of combined construction consulting experience, we have helped our clients mitigate risk across the country. We believe our years of success are attributed to our commitment to offering a personalized service tailored to each client’s individual needs.

Want to learn more about how Moran Consultants can help with your next CRE deal? Give us a call at 866-545-3350 or contact us online to learn how we can help safeguard your investment.

Understanding Local Law 97 and Its Impact on NYC’s Green Initiatives

Posted on by Charles Sanchez

In recent years, New York City has become one of the leading cities in passing legislation to reduce greenhouse gas emissions. With their city buildings accounting for approximately two-thirds of their overall emissions, former Mayor de Blasio made a bold commitment to reduce these emissions and make the city carbon neutral by 2050. A significant step towards achieving this ambitious goal is through the passing of Local Law 97, which will be taken into effect beginning in 2024.

Local Law 97: A Key Component of the Climate Mobilization Act

Local Law 97, a crucial component of the Climate Mobilization Act, was passed by the City Council in April 2019, aligning with the Mayor’s New York City Green New Deal. This law outlines a comprehensive strategy to tackle emissions by decreasing and/or eliminating the carbon footprint of certain city buildings.

Goals and Targets of Local Law 97

The primary objectives for Local Law 97 are to reduce emissions produced by the city’s largest buildings by 40 percent by 2030 and a remarkable 80 percent by 2050. To achieve this, buildings over 25,000 square feet must adhere to new energy efficiency and greenhouse gas emissions limits by 2024, with even stricter limits taking effect in 2030. Moreover, Local Law 97 established the Local Law 97 Advisory Board and Climate Working Groups to provide guidance and advice to the city on the best practices to meet these ambitious sustainability goals.

Local Law 97 primarily targets buildings that exceed 25,000 gross square feet, however, it also encompasses clusters of buildings on the same tax lot that together exceed 50,000 square feet and buildings owned by a condo association governed by the same board, totaling over 50,000 square feet. These criteria are designed to address emissions from the city’s most substantial buildings while providing clarity on affected properties. Starting in 2024, buildings that exceed their annual emission limits will face a fine of $268 per ton of CO2 equivalent over the limit. Emissions will be calculated based on tons of CO2 equivalent per square foot.

Chart of Local Law 97 penalties

Source: NYC Accelerator: New York City’s Climate Mobilization Act

There are some exemptions and compliance pathway options for properties such as affordable housing buildings, outlined within Local Law 97, ensuring that its application is both effective and fair. There are also numerous free resources available through NYC Accelerator for property owners to help them meet the new building requirements.

Staying Informed

To remain informed about Local Law 97 and its evolving implications, a valuable resource is the Department of Buildings (DOB) Greenhouse Gas Emission Reporting website. This website provides detailed information about emissions limits, exemptions, and compliance guidelines.

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Columbus on the Map: The Midwest’s New Tech Powerhouse

Posted on by Charles Sanchez

A recent article published by Construction Dive entitled “Columbus embraces its role as ‘Tech Capital of the Midwest”, delves into the rapid growth of Columbus, Ohio, and its emergence as a tech hub in the Midwest. The article highlights the resilience of Columbus throughout the years, such as during the economic downturn of 2008-2009. While initially known for its construction activities in healthcare and education projects, the city has strategically shifted its focus towards extensive industrial and technological developments.

Columbus Grows from Small Town Atmosphere to Tech Hub

Home to Ohio State University and headquarters for major corporations such as Bed Bath & Beyond, Nationwide, and Big Lots, Columbus’ appeal to businesses lies in its unique blend of a small-town atmosphere and its growing urban status. Several businesses have taken advantage of this growing metropolis and are contributing to the transformation of Columbus into a tech hub. This includes:

  • Intel’s colossal $20 billion semiconductor manufacturing facility
  • Google’s multimillion-dollar data centers
  • A $2 billion airport terminal expansion
  • And a $1.9 billion hospital project

State and local governments have also played a pivotal role in attracting global corporations, such as Intel and Amgen, further facilitating the establishment of major factories and operations in the city. In 2022 alone, an impressive 75 groundbreaking projects commenced in the semiconductor, electric vehicle, and life sciences sectors.

The Challenges of Rapid Growth

Even though the city is seeing major developments, Columbus’ rapid expansion has also posed some challenges. Just like other cities across the country, construction companies are grappling with a shortage of skilled labor as they compete with other employers for the same workforce. Additionally, there is a noticeable scarcity of qualified instructors and inspectors for construction-related training programs. To address this labor crisis, the industry is investing heavily in training and continuing education for its workforce.

The Pursuit of Innovation & Progress

The surge in construction activity and the rise of Columbus as a prospective tech hub have prompted the city to warmly embrace its newfound status as the “tech capital of the Midwest,” a distinction acknowledged by the state’s Lieutenant Governor. This construction upswing, characterized by big-ticket projects, highlights Columbus’ promise to become a city for innovation and progress.

While facing the looming challenges of a limited construction workforce, Columbus’ journey from a small-town gem to an expanding tech epicenter is a testament to its unwavering determination and adaptability, offering countless opportunities for both businesses and residents alike.

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Staffing Woes and Diesel Fuel Soars: A Snapshot of Construction Realities

Posted on by Charles Sanchez

In the world of commercial construction, every fluctuation in costs and labor availability can significantly impact a project’s timeline and budget. An analysis recently published by the Associated General Contractors of America (AGC) sheds light on the challenges facing the construction industry, revealing a monthly increase in costs driven by a dramatic surge in diesel fuel prices. The survey also underscores the ongoing staffing challenges faced by contractors, which have a direct impact on project completion. This serves as a stark reminder that supply chain disruptions experienced during the COVID-19 pandemic have not yet been fully mitigated. Below is an overview of the key insights derived from AGC’s research as well as the benefits of having a construction consultant on your team to ensure the success of your investment.

Soaring Diesel Fuel Prices

The headline-grabbing aspect of the AGC’s analysis is the near-record leap in the diesel fuel price index. From mid-July to mid-August, the producer price index for diesel fuel skyrocketed by a staggering 34.6%. This surge represents the most substantial one-month increase in diesel fuel prices since 1990. Further exacerbating the situation, retail diesel prices have continued their upward trajectory, with a 77 cents per gallon increase over just ten weeks.

Impact on Bid Prices

The effect of the diesel fuel price spike is evident in the broader landscape of construction costs. In August alone, these costs increased by 1.1%, marking the highest jump since January. However, it’s worth noting that while fuel costs played a significant role in this increase, other commodity prices remained relatively subdued. The index for new commercial building construction, a measure of the bid prices contractors charge for new structures, saw a modest 0.2% uptick in August. Year-over-year changes were also relatively mild, standing at 0.1% for inputs and 4% for bids.

Stable or Declining Prices for Other Commercial Construction Materials

Apart from volatile fuel costs, many construction materials experienced stable or declining prices in August. Cement and architectural coatings, for example, saw flat price indexes. There were also decreases of 0.2% for plastic construction products, 0.5% for steel mill products, and 0.4% for gypsum building materials. These figures suggest that the overall construction cost landscape is relatively stable beyond the diesel fuel price surge.

Ongoing Staffing Challenges

While fluctuating costs are a headache, the AGC’s annual workforce survey, conducted in collaboration with Autodesk, highlights an equally critical issue: staffing challenges. An astounding 85% of respondents reported having job openings for hourly skilled craft workers or salaried workers. Within this group of firms, 88% reported difficulty filling skilled craft positions, while 86% reported similar challenges for salaried openings. Furthermore, 61% of firms that experienced project delays attributed them to worker shortages.

Stephen E. Sandherr, the AGC’s chief executive officer, emphasized that the current approach to preparing future workers is failing the high-paying construction sector. Many parts of the country are struggling to find enough skilled workers to meet the increasing demand for construction projects. The survey findings reveal that two-thirds of contractors believe that many candidates lack the necessary skills to be employable in the industry. To address this gap, AGC officials stress the importance of exposing more individuals to construction career opportunities and providing them with the fundamental employment skills required for success.

How a Construction Consultant Can Protect Your Investment

While the construction industry grapples with the challenges of rising material costs and staffing shortages, there are strategic solutions available to help projects stay on time and within budget. One invaluable resource for achieving this goal is partnering with Moran Construction Consultants. Bringing a wealth of industry knowledge, our consultants utilize their years of experience to help project stakeholders make informed decisions that optimize resource allocation and budget management.

Skilled at adapting to changing circumstances in the face of fluctuating costs and labor market dynamics, we can provide recommendations to keep your project on the right track even when external factors threaten to derail it. Interested in learning more about how we can help? Contact us online or call us at 866-545-3350 to learn how our team of consultants can help protect your investment.