Monday, October 13, 2014

Construction costs rising in Charlotte

The cranes sprouting all over town offer ample evidence of what's becoming more and more obvious by the month: the slow-moving economic recovery is finally generating enough steam to lift the construction sector. Building permit applications are running higher than last year, especially in the hot multifamily sector. And employment in the labor sector that includes construction is up nearly 7 percent from last year in the Charlotte region.

But Stephen Keckeis, a vice president in Messer Construction Co.'s Charlotte office, said even such welcome growth can bring a few complications.  He pointed to the Cinncinnati-based company's recent market condition report, which takes the business temperature of the market in Charlotte and eight other cities where it operates.

It found that construction costs from May 2013 to this past May rose by 2 percent, higher than any other city. Keckeis said that's a function of growing construction activity. As more firms need more raw materials for their growing number of projects, the prices rise, buoyed by the increased demand.

Why are costs rising faster in Charlotte than the other cities? Keckeis responded by asking and answering a question of his own: "Where's all the growth in the country? Here, and in Texas."

Messer's index showed prices for lumber and softwood, gypsum products and fabricated structural steel up more than 7 percent.

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