Construction Costs will Continue to Rise in 2023

April 11th, 2023

That does not mean you can’t get better pricing than your current costs.


Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc

According to Global Commercial Real Estate Services CBRE After two years of double-digit increases, they expect construction cost growth of 5.4% in 2023. Higher interest rates and slow economic growth could cause delays to many constructions projects. This would alleviate labor and materials shortages and limit the extent to which contractors could boost margins.

This is both good news and bad. While costs may be coming down and you should take advantage of that by market testing everything that you buy, contractors and builders may also raise their prices to recoup costs from the past several high-priced years. If it were me, I would try to unbundle anything that you can and test the pricing of all categories in this space. Once you have done that it may be time to negotiate with your general contractor. It also may be time to look at lease language and unbundle things like Common Area Maintenance or CAM as that is another hiding place for high priced services.

SafeSourcing is a Procure to Pay SaaS based provider of a number of e-Procurement solutions and associated white glove services that are part of our SaaS offered SafeSourceIt™ eSourcing suite. These include but are not limited to SafeContract™, SafePO™, SafeDocument™ and our SafeSourceIt™ Global Supplier Database that includes over 557,000 vendor/suppliers.

For more information, please contact a SafeSourcing Customer Services Associate.


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