flexiblefullpage -
billboard - default
interstitial1 - interstitial
Currently Reading

The latest Beck Group report sees earlier project collaboration as one way out of the inflation/supply chain malaise

Market Data

The latest Beck Group report sees earlier project collaboration as one way out of the inflation/supply chain malaise

The firm takes a closer look at costs in six of the country’s hotter building markets.

By John Caulfield, Senior Editor | July 28, 2022
Project Collaboration
Courtesy Pexels.

In the first six months of 2022, quarter-to-quarter inflation for construction materials showed signs of easing, but only slightly. “It’s important to clarify that costs are not decreasing; a more accurate description is that [they are] getting expensive less quickly,” stated Dallas-based architecture and construction firm The Beck Group, in its Summer 2022 Biannual Cost Report, which Beck released this week.

Covering January through June of this year, the report combines market data from a variety of sources—including AIA, FMI, McKinsey & Company, Autodesk, Cumming, the Urban Land Institute, and Associated General Contractors of America—with insights from the firm’s preconstruction teams in six markets: Atlanta, Austin, Charlotte, Dallas-Fort Worth, Denver, and the state of Florida.

Market conditions remain challenging nearly everywhere. “Schedule-related constraints are a new norm in today’s market,” The Beck Group contends. “Construction firms are in the middle of suppliers who can’t or won’t commit to pricing longer than 10 days and owners with historically prolonged approval processes. This reality conflicts with the past when it was still possible to hold pricing for upwards of 60 days.”

Input Prices and Construction spending
Heavy metal. Products made of steel, copper, brass and other metals have been most vulnerable to inflationary escalation. Courtesy: The Beck Group


Inflation continues to rise
The Beck Group foresees significant inflation in the coming months.

That being said, The Beck Group claims that the industry is on the cusp of a “new era in collaboration to manage costs and schedules.” That is especially true for developers and owners that bring their AEC partners into projects as early as possible. In its report, The Beck Group offers a list of strategies for managing inflation and supply-chain disruptions that mostly revolve around earlier procurement (see box).


Beck Group has devised strategies for fighting inflation and supply chain disruptions.
Earlier procurement is among the strategies that Beck Group recommends to fight project inflation and supply-chain woes.

Beck itself creates procurement packages for its clients to secure materials and equipment, a service that involves the firm’s design and construction teams.



The Beck Group explored costs in six markets.
The cost of office construction and renovation in six markets was one of several building types that The Beck Group's report examined.

On the whole, The Beck Group is seeing significant demand and construction activities in the Sun Belt, in line with the “constant migration” of people and businesses to that region. (It points out, for example, that 43 high-rise towers are under development or construction in Austin.) To keep up with that demand, subcontractors in Texas must rely on imported cement (which, ironically, is among the construction materials least affected by current inflation).

The report takes a deeper dive into the six Sun Belt markets mentioned above, and breaks down project costs by building types—office, healthcare, higher education, faith-based, hospitality, parking, and site work—and their respective sub niches.

The Denver metro is experiencing high demand for multifamily and mixed-use projects. Existing and planned projects are plentiful in the Atlanta market, and subcontractors report substantial backlogs. Building activity in the Florida market remains healthy, bolstered by the state’s economy that is expected to expand by 4 percent between now and 2024. The most significant demand for construction is education, healthcare, and aviation.

Across all building types, it costs more to build or renovate in Denver than in the other five markets, albeit only marginally so in several cases. For example, in healthcare, Denver’s costs per sf for ambulatory surgery centers—ranging from $477 to $583—were around $10 to $25 higher than the other metros. Science and lab buildings cost from $650 to $901 per sf to construct in Denver, versus $631 to $885 in Austin, another S+T hotbed.

The report also compares the cost per key to build or renovate hotels in these six markets, as well as the cost per space for parking and the cost per acre for site development.



Construction unemployment is easing a bit
Construction unemployment, while still relatively high, has been receding nationally since January.

The Beck Group report corroborates what other recent studies have been finding: that the construction employment market, nationally, is improving. Beck predicts this trend to continue as higher wages lure more people into the profession. The employment situation might also explain the slight bump in industry confidence that was evident in the first half of the year.  

Related Stories

Multifamily Housing | Mar 14, 2023

Multifamily housing rent rates remain flat in February 2023

Multifamily housing asking rents remained the same for a second straight month in February 2023, at a national average rate of $1,702, according to the new National Multifamily Report from Yardi Matrix. As the economy continues to adjust in the post-pandemic period, year-over-year growth continued its ongoing decline.

Contractors | Mar 14, 2023

The average U.S. contractor has 9.2 months worth of construction work in the pipeline, as of February 2023

Associated Builders and Contractors reported today that its Construction Backlog Indicator increased to 9.2 months in February, according to an ABC member survey conducted Feb. 20 to March 6. The reading is 1.2 months higher than in February 2022.

Industry Research | Mar 9, 2023

Construction labor gap worsens amid more funding for new infrastructure, commercial projects  

The U.S. construction industry needs to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet demand for labor, according to a model developed by Associated Builders and Contractors. The construction industry averaged more than 390,000 job openings per month in 2022.

Market Data | Mar 7, 2023

AEC employees are staying with firms that invest in their brand

Hinge Marketing’s latest survey explores workers’ reasons for leaving, and offers strategies to keep them in the fold.

Multifamily Housing | Feb 21, 2023

Multifamily housing investors favoring properties in the Sun Belt

Multifamily housing investors are gravitating toward Sun Belt markets with strong job and population growth, according to new research from Yardi Matrix. Despite a sharp second-half slowdown, last year’s nationwide $187 billion transaction volume was the second-highest annual total ever.

Contractors | Feb 14, 2023

The average U.S. contractor has nine months worth of construction work in the pipeline

Associated Builders and Contractors reports today that its Construction Backlog Indicator declined 0.2 months to 9.0 in January, according to an ABC member survey conducted Jan. 20 to Feb. 3. The reading is 1.0 month higher than in January 2022.

Office Buildings | Feb 9, 2023

Post-Covid Manhattan office market rebound gaining momentum

Office workers in Manhattan continue to return to their workplaces in sufficient numbers for many of their employers to maintain or expand their footprint in the city, according to a survey of more than 140 major Manhattan office employers conducted in January by The Partnership for New York City.

Giants 400 | Feb 9, 2023

New Giants 400 download: Get the complete at-a-glance 2022 Giants 400 rankings in Excel

See how your architecture, engineering, or construction firm stacks up against the nation's AEC Giants. For more than 45 years, the editors of Building Design+Construction have surveyed the largest AEC firms in the U.S./Canada to create the annual Giants 400 report. This year, a record 519 firms participated in the Giants 400 report. The final report includes 137 rankings across 25 building sectors and specialty categories.   

Multifamily Housing | Feb 7, 2023

Multifamily housing rents flat in January, developers remain optimistic

Multifamily rents were flat in January 2023 as a strong jobs report indicated that fears of a significant economic recession may be overblown. U.S. asking rents averaged $1,701, unchanged from the prior month, according to the latest Yardi Matrix National Multifamily Report.

Market Data | Feb 6, 2023

Nonresidential construction spending dips 0.5% in December 2022

National nonresidential construction spending decreased by 0.5% in December, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $943.5 billion for the month.

boombox1 - default
boombox2 -
native1 -

More In Category

Multifamily Housing

Multifamily housing rent rates remain flat in February 2023

Multifamily housing asking rents remained the same for a second straight month in February 2023, at a national average rate of $1,702, according to the new National Multifamily Report from Yardi Matrix. As the economy continues to adjust in the post-pandemic period, year-over-year growth continued its ongoing decline.

halfpage1 -

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021


Magazine Subscription

Get our Newsletters

Each day, our editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.


Follow BD+C: