Volatility in the market over the last several years has pushed manufacturing and industrial companies across the country to throw in the towel on construction projects, but unfavorable conditions shouldn’t stop the possibility for opportunity.
Here are three reasons why the current economy shouldn’t stop you from building.
1. Prices are Stabilizing
Inflation has plagued the construction industry and the impacts of COVID-19 on the supply chain are still being felt, but key indicators are trending in a positive direction.
On December 5, the Associated General Contractors of America issued its eighth Construction Inflation Alert. In it, data showed the rate of increase in material prices was slowing going into 2023, standing at 11.2 percent. According to an analysis by the Associated Builders and Contractors, both overall and nonresidential construction input prices dropped 2.7 percent in December, the largest monthly drop since April 2020.
While we are not out of the woods yet, there is more stability in the market and that translates into better budget projections and timelines for your construction project.
2. Interest Rates Are Still Low
Business owners with fortress balance sheets understand how to take advantage of economic ups and downs. Instead of looking one year down the road, they are looking at 10 years and beyond.
In the grand scheme of things, interest rates are lower than they were 30 years ago. While 7 percent seems high compared to the 2 percent rates seen during the pandemic, 7 percent is still historically low and favorable when looking at the overall picture of your business.
Nobody can accurately predict what might happen a year from now, but by doing one project now, the later ones will be more profitable. Don’t wait around for interest rates to go back down because chances are you may end up paying higher interest rates and higher building costs by delaying.
3. There is the Option to Negotiate
With more businesses putting their construction projects on hold, the demand for builders is down. This means that you will be in a better position to negotiate.
When the demand is reduced for labor and supplies, the overall construction cost will go down as a result.
By hiring a construction advocate like Imperien, you can eliminate many of the burdens that present themselves during the hiring, ordering, and overall construction process. We are able to guarantee a not-to-exceed budget for you because we work to find the materials and contractors for your project that match the original budget promised. If not, we eat the cost, so you don’t have to.
We aren’t adding a level of bureaucracy, we’re replacing a level of inefficiency to make the process more efficient.
If you’re interested in learning more about how Imperien can help your business with its upcoming expansion projects, give us a call at 815-988-7970 or click on the button below to send us a message.
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