Archinect - News

Construction costs projected to see largest increase in years due to supply and demand pressures

2022-08-29T15:44:00-04:00

According to CBRE's new 2022 U.S. Construction Cost Trends report, nationwide industry price levels have posted the largest increase in years, driven by labor shortages, inflation, supply chain disruptions, the ongoing impact of the pandemic, and the war in Ukraine.

CBRE forecasts a 14.1 percent year-over-year increase in construction costs by the end of the year, an increase from last year’s 11.5 percent gain. This 2022 figure is the largest increase since CBRE began tracking cost projections in 2007, exceeding the average rise of 2 percent to 4 percent per year. Following 2022, CBRE predicts cost increases to decline back to their historical range at 4.3 percent next year and 2.9 percent in 2024 as supply chain issues, inflation, and material production difficulties ease.

“The construction industry thrives on predictability, but we continue to grapple this year with nume...

Architects earn more from renovations than new builds for first time, fueled by workplace revolution

2022-05-10T09:00:00-04:00

Architecture firms are billing more from reconstruction and renovation projects than they are from new builds for the first time; a milestone driven by soaring demand for office renovations. In the 20 years that the AIA has been collecting data on billings for renovations versus new build projects, the share of billings received from renovations has been consistently rising for over a decade, suggesting the new milestone is not entirely attributable to the COVID-19 pandemic.

Throughout 2021, works to existing facilities reached 52% of architecture firm billings. According to AIA Chief Economist Kermit Baker, one quarter of works to existing facilities comprise adaptive reuse, with another quarter owing to conversion and basic interior modernization. 18% comprises tenant fit-outs while adding usable space and upgrading building facades or systems each comprise 10%.

“This is a l...