The Station HOUSE
RECENT CONSTRUCTION PRICES FOR FIRE/RESCUE STATIONS Ken Newell, AIA, LEED AP BD+C
E
very so often, I look back with amazement at where the construction costs of Fire/Rescue facilities have been, and where they are going. I realize that I’m getting old, but I’m reminded of just how old I’m getting when I look back at the construction cost of the fire stations our firm has designed in the 1970s. At that time, you could build a quality station…we’re not talking pole barn…for $50+ per square foot. I’d love to reminisce and trace the five-decade history of how those costs have changed, but it suffices to say quality stations cost a little more than that today! In the “good ole days” you could count on consistent construction cost inflation of 3-5% per year? If you were developing a Capital Improvement Plan for a new station three years from now you could just take today’s construction costs, increase them by 3-5% per year for three years, and know that what you had budgeted would likely be fine. Not anymore! We all understand that the construction industry has always experienced price spikes (and rarely decreases) mostly due to some sort of material or labor force issue. Many departments, who one year ago, budgeted more than enough funds to build, are now this year forced to scale back their plans Our design firm typically receives construction bids on multiple projects each month, most of which are fire or other public safety facilities. The construction cost tracking provided herein is based solely on pricing received on Fire/Rescue stations that we have been associated with for over five decades. If you have intentions to build or renovate soon, please take a moment to consider what is happening in the construction world and what you can do about it to protect the viability of your upcoming project.
Katrina were just some of the events that commonly yielded 15-30% increases per year in construction inflation rates. The rarity of seeing construction prices drop was experienced during
labor and material shortages when the economy turned around. By 2013, the pent-up demand resulting from 4-5 years of not moving forward with construction resulted in a construction boom
If you have intentions to build or renovate soon, please take a moment to consider what is happening in the construction world and what you can do about it to protect the viability of your upcoming project. 2008 and 2009, during the depths of the Great Recession. In 2008 construction prices decreased by approximately 12%. Then in 2009, they dropped another 16%. The “luck of the draw” projects that were “shovel-ready” and funded during this time became the beneficiaries of the lowest construction bids in years. Unfortunately, approximately onethird of all building contractors, subcontractors, and material suppliers went out of business during this period, setting us up for
TWENTY PLUS-YEAR HISTORY OF STATION PRICES Looking back over the past couple of decades, we find that there have always been periods of higher-thannormal construction price increases, usually resulting from identifiable causes. From 1999 until 2006 some events caused incredible construction cost increases. The war efforts following the 911 attacks, the tremendous growth of the Chinese economy, and natural disasters such as Hurricane 38 | CAROLINA FIRE RESCUE EMS JOURNAL | SUMMER 2022
which drove 2014 construction prices up between 20-23%. Following a modest price increase of 3% in 2015, the period from 2016 to 2019 saw higher than normal inflation and escalation increases, and unusual volatility in bidding, due to several hurricanes and wildfires, higher construction demands, international tariffs or the threat of tariffs, and a general building boom due to a strong economy. Then came 2020, the volatile construction price period that we
still find ourselves in today. These past couple of years have proven to be a perfect storm of multiple events and issues that have driven construction cost increases higher than seen in a very long time. The Pandemic shut down labor pools and entire economic sectors for long and continuous periods. The Supply Chain disruptions continue to delay or cancel the availability of construction materials, and lengthen a project’s construction period, adding costs for the foreseeable future. Both Labor and Material Shortages grow as the aforementioned and following problems abound. Believing that construction prices will not likely moderate soon, project owners are pushing their projects forward, thus creating even Higher Demand. Fuel prices have skyrocketed due to current policy decisions. While these issues and more place tremendous pressures on actual construction costs, other issues, such as higher interest rates, are increasing other project cost categories. WHAT TO EXPECT FOR THE NEXT YEAR? Likely, more of the same. At least that is what most in the design and construction industry guess. The problems that have created the current construction climate and challenges didn’t happen overnight, and they’re not likely to be resolved overnight.
Stewart-Cooper-Newell Architects fire stations. ems. training facilities.
www.fire-station.com 704.865.6311
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