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

Market Data | Aug 25, 2022

‘Disruptions’ will moderate construction spending through next year

JLL’s latest outlook predicts continued pricing volatility due to shortages in materials and labor

Market Data | Aug 2, 2022

Nonresidential construction spending falls 0.5% in June, says ABC

National nonresidential construction spending was down by 0.5% in June, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.

Hotel Facilities | Jul 28, 2022

As travel returns, U.S. hotel construction pipeline growth follows

According to the recently released United States Construction Pipeline Trend Report from Lodging Econometrics (LE), the total U.S. construction pipeline stands at 5,220 projects/621,268 rooms at the close of 2022’s second quarter, up 9% Year-Over-Year (YOY) by projects and 4% YOY by rooms.

Codes and Standards | Jul 22, 2022

Hurricane-resistant construction may be greatly undervalued

  New research led by an MIT graduate student at the school’s Concrete Sustainability Hub suggests that the value of buildings constructed to resist wind damage in hurricanes may be significantly underestimated.

Market Data | Jul 21, 2022

Architecture Billings Index continues to stabilize but remains healthy

Architecture firms reported increasing demand for design services in June, according to a new report today from The American Institute of Architects (AIA).

Market Data | Jul 21, 2022

Despite deteriorating economic conditions, nonresidential construction spending projected to increase through 2023

Construction spending on buildings is projected to increase just over nine percent this year and another six percent in 2023, according to a new report from the American Institute of Architects (AIA). 

Building Team | Jul 18, 2022

Understanding the growing design-build market

FMI’s new analysis of the design-build market forecast for the next fives years shows that this delivery method will continue to grow, despite challenges from the COVID-19 pandemic.

Market Data | Jul 1, 2022

Nonresidential construction spending slightly dips in May, says ABC

National nonresidential construction spending was down by 0.6% in May, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.

Market Data | Jun 30, 2022

Yardi Matrix releases new national rent growth forecast

Rents in most American cities continue to rise slightly each month, but are not duplicating the rapid escalation rates exhibited in 2021.

Market Data | Jun 22, 2022

Architecture Billings Index slows but remains strong

Architecture firms reported increasing demand for design services in May, according to a new report today from The American Institute of Architects (AIA).

boombox1 - default
boombox2 -
native1 -

More In Category

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: