What's Hot

    Tax Bill Would Make LIHTC Permanent

    July 2, 2025

    Mesa P&Z Recommends Data Center Zoning Restrictions

    July 2, 2025

    Retail Center & Senior Residential Development Planned in Casa Grande

    July 1, 2025
    Facebook Twitter Instagram
    AZBEX
    NEWS TICKER
    • [July 2, 2025] - Tax Bill Would Make LIHTC Permanent
    • [July 2, 2025] - Mesa P&Z Recommends Data Center Zoning Restrictions
    • [July 1, 2025] - Retail Center & Senior Residential Development Planned in Casa Grande
    • [July 1, 2025] - New 108-Room Hotel, Conference Center Planned in S. Phoenix
    • [July 1, 2025] - State Government Shutdown Averted as Hobbs Signs Budget
    • [July 1, 2025] - Industry Professionals 07-01-25
    • [July 1, 2025] - Commercial Real Estate 07-01-25
    • [June 27, 2025] - Arterial Life Cycle Program Covers 20 Years of Street Development
    Facebook Twitter YouTube LinkedIn
    • Home
    • News
      1. View Latest
      2. Planning & Development
      3. Local News
      4. Classifieds
      5. Editorial Analysis
      6. Budgets & Funding
      7. Commercial Real Estate
      8. People on the Move
      9. Arizona Projects
      10. Legislation & Regulations
      11. Trends

      Retail Center & Senior Residential Development Planned in Casa Grande

      July 1, 2025

      New 108-Room Hotel, Conference Center Planned in S. Phoenix

      July 1, 2025

      Phoenix-to-Tucson Rail Study Advances

      June 27, 2025

      Kimpton Hotel Palomar Phoenix to See $5.5M in Renovations

      June 27, 2025

      Mesa P&Z Recommends Data Center Zoning Restrictions

      July 2, 2025

      Arterial Life Cycle Program Covers 20 Years of Street Development

      June 27, 2025

      $56M+ MAG Program will Enable $90M in Arterial Street Widening Projects

      June 24, 2025

      Ariz. Construction Shed 1,700 Jobs in May

      June 24, 2025

      Glendale Voters to Determine VAI Resort’s Fate

      May 16, 2025

      Legislation Would Effectively Strip NIMBYs of Referendum Tool

      February 11, 2025

      2025 Forecast Tries to Clarify an Uncertain Market

      February 7, 2025

      KOREPlex Buckeye Site Quietly Listed For Sale

      January 31, 2025

      State Government Shutdown Averted as Hobbs Signs Budget

      July 1, 2025

      Arterial Life Cycle Program Covers 20 Years of Street Development

      June 27, 2025

      $56M+ MAG Program will Enable $90M in Arterial Street Widening Projects

      June 24, 2025

      MAG Committee Info Details Upcoming Pavement Plans

      June 20, 2025

      Commercial Real Estate 07-01-25

      July 1, 2025

      Commercial Real Estate 06-24-25

      June 24, 2025

      Commercial Real Estate 06-17-25

      June 17, 2025

      Commercial Real Estate 06-10-25

      June 10, 2025

      Industry Professionals 07-01-25

      July 1, 2025

      Industry Professionals 06-24-25

      June 24, 2025

      Industry Professionals 06-17-25

      June 17, 2025

      Industry Professionals 06-10-25

      June 10, 2025

      Arizona Projects 06-27-25

      June 27, 2025

      Arizona Projects 06-20-25

      June 20, 2025

      Arizona Projects 06-13-25

      June 13, 2025

      Arizona Projects 06-06-25

      June 6, 2025

      Tax Bill Would Make LIHTC Permanent

      July 2, 2025

      State Government Shutdown Averted as Hobbs Signs Budget

      July 1, 2025

      Hobbs, Legislators Reach Water Use Compromise

      June 24, 2025

      Phoenix Delays Data Center Rezone Vote

      June 20, 2025

      Ariz. Construction Shed 1,700 Jobs in May

      June 24, 2025

      NABH Council Partnership Wants to Expand Workforce Pipeline

      June 17, 2025

      Project Abandonments Hit a Record in May

      June 13, 2025

      U.S. Construction Added 4,000 Jobs in May

      June 10, 2025

      Tax Bill Would Make LIHTC Permanent

      July 2, 2025

      Mesa P&Z Recommends Data Center Zoning Restrictions

      July 2, 2025

      Retail Center & Senior Residential Development Planned in Casa Grande

      July 1, 2025

      New 108-Room Hotel, Conference Center Planned in S. Phoenix

      July 1, 2025
    • AZBEX
      • Subscribe
      • Classifieds
      • Advertising
    • DATABEX
      • Webinars
      • Monthly Snapshot
    • Events
      • 2025 Mid-Year Update
    • About Us
      • Meet the Company
      • Meet the Sales Team
      • Meet the Editorial Team
      • Meet the BEXperts
    AZBEX
    Home » Planning & Development » June LMS Event Covers Rising Construction Costs
    Planning & Development

    June LMS Event Covers Rising Construction Costs

    BEX StaffBy BEX StaffJune 11, 2019No Comments5 Mins Read
    Credit: Kristen Miraglia from BEX
    Share
    Facebook Twitter LinkedIn Pinterest Email

    By Rebekah Morris for AZBEX

    On Thursday, more than 100 attendees at the latest Leading Market Series event listened to a lively roundtable discussion regarding the rising cost of construction and what they predict will continue to happen in the next six to 12 months.

    Moderator and BEX President and Founder, Rebekah Morris guided the discussion between three types of firms: General Contractors: Mike Bontrager, President of Adolfson & Peterson Construction, Roger Rowley, Pre-Construction Manager for Hunter Contracting; Subcontractors: Mike Greenawalt, Senior Vice President of Rosendin Electric; Brian Scherer, Director of Business Development, Bell Steel; Andy Clarke, General Manager for Roofing Southwest; Materials Suppliers: Lloyd Hannon, Phoenix Ready Mix Sales Manager for CEMEX, and Ben Rathke, General Manager for Ferguson.

    To start the discussion, Morris requested each participant gauge where the market is in terms of supply and demand. All participants agreed the market is demanding construction services, while supply has not increased.

    Morris presented data from the Arizona Departments of Revenue and Administration showing the history of both construction activity and employment. Both data sets tracked similarly – peaking in 2005-2006, dropping to a low point in 2009-2019, and having experienced a bumpy recovery since then. Construction activity is still nearly 40 percent off the peak level of volume, while employment is nearly 30 percent lower than the peak level of 2005.

    Those indicators tell us that the market as a whole is becoming less efficient; requiring more labor to produce the same level of output.

    Input #1 – Materials

    A simplistic view of the cost of construction can be thought of as an equation:

    Materials + Labor + Overhead/Profit = Contract Bid Price

    Discussing the cost of materials, Bell Steel, Ferguson and CEMEX described materials cost increases in the range of 15 to 25 percent since the beginning of 2019. While the aggregate and raw materials that make concrete are sourced locally, building products including steel, glass, copper, and mechanical components are more likely to be imported. Building products are rising in cost due to increased demand but also tariffs and increased manufacturing labor costs.

    While copper is currently trading at approximately $2.70 according to Rosendin Electric, he sees this commodity as highly likely to increase in cost over the next six to 12 months. Greenawalt described the heyday of 2006-2007 as a time when he pre-purchased copper to avoid the rapid price increases.

    All participants agreed that the impact of the delay from engineering estimate/budget to subcontractor bids, through contract buyout to eventual purchase order as a big reason for the sticker shock we’re experiencing now in the market. The total timeframe from preliminary design budget numbers to actual purchase of materials could be over a year. Panelists explained there is no way for anyone to hold pricing for that extended timeline. More often bid prices can be held for 30-60 days.

    Input #2 – Labor

    Roundtable participants all echoed the same thought on this topic: the market needs more skilled labor, and the shortage is driving the cost of construction higher. Altogether, Arizona is short 100K skilled construction workers.

    When asked how many workers each subcontractor would hire today: Rosendin hired 90 union electricians in the last week alone for one major project in Chandler, pulling from other locations through his union connections and plans on hiring another 50-75 people in the next month. Roofing Southwest would hire 15-30, and Bell Steel would hire 15 steel fabrication workers.

    Clarke with Roofing Southwest described the current state of construction labor. “Roofing is not easy, it’s not glamorous and we’ve had to raise wages in order to attract people to do the job.”

    Bontrager with Adolfson & Peterson described Build Your Future, an initiative he is co-chairing through the Greater Phoenix Chamber of Commerce that aims to fill the construction workforce pipeline. All panelists had in-house training or access to workforce development programs, from Ferguson University to safety courses for field crews. Bontrager summed it up well. “Training is available for anyone who wants a career in this field; what we need is to really fill the pipeline with people.”

    Greenawalt described one challenge of convincing parents that construction is safe saying, “Parents think we’re going to kill their kids and that’s just not true. Construction as an industry is safer than it has ever been.”

    Safety has not come for free, however. Clarke described the safety measures Roofing Southwest has put in place saying, “we have 14 full time safety personnel; this cost just wasn’t there 5-10 years ago.”

    Conclusions – Construction Prices will Not be Going Down

    All participants agreed their current level of backlog is at or near record levels. They did also seem to agree with the national predictions of maintaining a 5 percent year-over-year escalation as reasonable. While that figure has been woefully low for the last 12-18 months, the panel seemed to agree that the rate of increases should moderate, and the 5 percent should hold for the next six to 12 months at least.

    Stay tuned for a more in-depth series on this topic.

    Share. Facebook Twitter Pinterest LinkedIn WhatsApp Reddit Tumblr Email

    Related Posts

    Retail Center & Senior Residential Development Planned in Casa Grande

    July 1, 2025

    New 108-Room Hotel, Conference Center Planned in S. Phoenix

    July 1, 2025

    Phoenix-to-Tucson Rail Study Advances

    June 27, 2025

    Leave A Reply Cancel Reply

    You must be logged in to post a comment.

    Our Picks

    Tax Bill Would Make LIHTC Permanent

    July 2, 2025

    Mesa P&Z Recommends Data Center Zoning Restrictions

    July 2, 2025

    Retail Center & Senior Residential Development Planned in Casa Grande

    July 1, 2025

    New 108-Room Hotel, Conference Center Planned in S. Phoenix

    July 1, 2025
    Stay In Touch
    • Facebook
    • Twitter
    • LinkedIn
    • YouTube
    Don't Miss
    Federal

    Tax Bill Would Make LIHTC Permanent

    July 2, 20250

    By National Council of State Housing Agencies (On June 16), Senate Finance Committee Chairman Mike…

    Mesa P&Z Recommends Data Center Zoning Restrictions

    July 2, 2025

    Retail Center & Senior Residential Development Planned in Casa Grande

    July 1, 2025

    New 108-Room Hotel, Conference Center Planned in S. Phoenix

    July 1, 2025

    BEX serves architecture, engineering and construction firms as well as all the ancillary product and service categories that market to them. These include manufacturing representatives, public agencies and private real estate organizations, specialty subcontractors and services providers related to our industry.

    Our Picks

    Tax Bill Would Make LIHTC Permanent

    July 2, 2025

    Mesa P&Z Recommends Data Center Zoning Restrictions

    July 2, 2025

    Retail Center & Senior Residential Development Planned in Casa Grande

    July 1, 2025
    Contact Us

    Phone: 480-709-4190
    Address: P.O. Box 12196 Tempe, AZ 85284
    Email: sales@azbex.com

    Type above and press Enter to search. Press Esc to cancel.