Commercial Contracting Challenges Expected to Continue

The challenges facing commercial contractors – including increased costs of materials and labor, shortages, and delays – will likely continue in the future, according to a recent Cushman & Wakefield survey.

A whopping 98% of general contractors surveyed by the firm indicated an increase in supplier costs and material lead times, while 75% reported increased project execution timelines. And 96% of GCs said they expect future supplier costs to remain high, while 73% anticipate project execution timelines to increase slightly to significantly. Eighty-eight percent expect lead times to increase slightly to significantly in the next six months.

“Sound planning with clearly defined strategic goals allows for a more certain measure of true risk profile and a better prediction on a project’s cost and estimated time of delivery,” writes Cushman’s Jason D’Orlando. “Project managers must be brought aboard early to revise  timelines,  reduce risk and deploy new tactics, all strategic efforts that will increase the likelihood of meeting a project’s budgets, milestones and timelines.  Preprogramming is the key to running a successful and on-time project in 2022 compared to 2019. Early material procurement and expediting the early works package while you are still in the location analysis and concept planning phases saves time and prevents cost overruns.”

A bright spot for commercial projects/? The life science sector, which boasts nearly 21 million square feet of projects under construction, a figure that’s more than double pre-pandemic levels. The pipeline also includes 32 million square feet of proposed projects in life sciences hotbed Boston and the San Francisco Bay Area.

Life sciences accounts for 24.8 million square feet of office space in Boston, with 14 million square feet of that LEED-certified, according to CommercialCafe, whose analysts say the area is “poised for significant further expansion.”