With the construction industry being hard hit by inflation, builders need to take a less-traditional approach.
Whether filling up your gas tank or shopping cart, the impact of inflation remains a thorn in the side of those seeking to purchase goods and services in today’s economy. And while the numbers have ticked slightly downward recently from a 40-year high, the effects of inflation continue to plague most business sectors in the United States.
One of the hardest hit is the construction industry, where the price of steel, copper, lumber and aluminum reached all-time highs in 2024. No doubt, the substantial price increases of these materials have had a direct impact on the entire building process, from planning to bidding to completion.
And, it’s not just new home and office construction that has been adversely affected by the rising prices of these goods. Those in the home décor and renovation industry must also find ways to navigate prolonged wait times for the delivery of vital materials.
Initially brought on by the pandemic that resulted in closures and delays at international factories producing most of these items, the supply of construction materials has significantly slowed in the United States, driving up the cost of available materials needed to complete the job. And, because building materials are being used as soon as they are manufactured, the wait list for them grows even longer. This leads to costly project deadlines, delays, and increased construction and renovation expenses.
These costs are then passed on to the consumer. According to The Wall Street Journal, supply-chain backlogs combined with inflationary pressures have sent new home prices skyrocketing to record levels.
What Are the Alternatives?
To contend with delays and price surges resulting from material shortages, a growing number of designers, contractors and developers are discovering that alternative materials can offer similar strength and design requirements at a fraction of the expense.
Techniques currently being used include substituting cement with other materials that have comparable properties, and reprocessing resources taken from demolition sites that would have ultimately been wasted. However, the lack of qualified training with these new materials can prompt construction site lawsuits and workers compensation claims, according to insurance specialists.
For instance, materials such as ashcrete, hempcrete and timbercrete can all be viable, lower-cost options to the more traditional concrete. Additionally, prefabricated wall panels and framing systems in wood-framed projects can limit material waste, while used bricks, reclaimed wood, and stone veneers offer additional ways to use recycled materials and save money.
Other examples of non-conventional materials used for the construction and renovation of homes and offices include natural resources like volcanic rock, rammed earth and adobe brick. In addition to being readily available onsite, they present the benefits of added heating and cooling due to the natural insulation they provide. Alternative materials like these are often tied to sustainability efforts and have proven to be valuable during a supply chain crisis.
From vegetative roofs to mass timber buildings to advanced solar panel technology, the green building space is evolving rapidly. The green building concept itself isn’t new, but new technology, materials, and construction methods bring unforeseen risks, according to Alicia Pavelko, head of construction innovation and sustainability at Zurich North America.
“The vast majority of the new ‘sustainable’ or ‘green energy’ production plants being built are utilizing new and emerging technology,” she says. “The underwriters and carriers do not have the luxury of years of rigorous testing and use to see how the product performs and what delineates a good versus a bad risk.”
Purchasing building materials ahead of time is another resourceful way for builders to cut costs. Even if a project isn’t immediately in the works, ordering needed materials in advance at a fixed price can help avoid future price increases resulting from inflation. The cost of storing materials now is likely to be less than that of purchasing them in the months ahead.
Implementing modern construction techniques can also help mitigate inflation. Implementing modern techniques, such as building components of the structure in a factory, can help reduce the pain of inflation. Since all components are transported from one place, transportation costs are dramatically reduced. A contractor with a proclivity for efficiency and reducing waste throughout each stage of the project can also be of tremendous value when it comes to keeping expenses down.
Looking Ahead
Chances are inflation and cost increases to office and home building projects are not going away anytime soon. As a result, designers, contractors and renovators must find innovative ways to cut costs at all stages and stay within budget. Careful planning, flexibility, and a willingness to explore non-conventional building materials, can help reduce inflation risks for ground-up, build-out and renovation projects.
Unconventional Thinking
With the construction industry being hard hit by inflation, builders need to take a less-traditional approach.
Whether filling up your gas tank or shopping cart, the impact of inflation remains a thorn in the side of those seeking to purchase goods and services in today’s economy. And while the numbers have ticked slightly downward recently from a 40-year high, the effects of inflation continue to plague most business sectors in the United States.
One of the hardest hit is the construction industry, where the price of steel, copper, lumber and aluminum reached all-time highs in 2024. No doubt, the substantial price increases of these materials have had a direct impact on the entire building process, from planning to bidding to completion.
And, it’s not just new home and office construction that has been adversely affected by the rising prices of these goods. Those in the home décor and renovation industry must also find ways to navigate prolonged wait times for the delivery of vital materials.
Initially brought on by the pandemic that resulted in closures and delays at international factories producing most of these items, the supply of construction materials has significantly slowed in the United States, driving up the cost of available materials needed to complete the job. And, because building materials are being used as soon as they are manufactured, the wait list for them grows even longer. This leads to costly project deadlines, delays, and increased construction and renovation expenses.
These costs are then passed on to the consumer. According to The Wall Street Journal, supply-chain backlogs combined with inflationary pressures have sent new home prices skyrocketing to record levels.
What Are the Alternatives?
To contend with delays and price surges resulting from material shortages, a growing number of designers, contractors and developers are discovering that alternative materials can offer similar strength and design requirements at a fraction of the expense.
Techniques currently being used include substituting cement with other materials that have comparable properties, and reprocessing resources taken from demolition sites that would have ultimately been wasted. However, the lack of qualified training with these new materials can prompt construction site lawsuits and workers compensation claims, according to insurance specialists.
For instance, materials such as ashcrete, hempcrete and timbercrete can all be viable, lower-cost options to the more traditional concrete. Additionally, prefabricated wall panels and framing systems in wood-framed projects can limit material waste, while used bricks, reclaimed wood, and stone veneers offer additional ways to use recycled materials and save money.
Other examples of non-conventional materials used for the construction and renovation of homes and offices include natural resources like volcanic rock, rammed earth and adobe brick. In addition to being readily available onsite, they present the benefits of added heating and cooling due to the natural insulation they provide. Alternative materials like these are often tied to sustainability efforts and have proven to be valuable during a supply chain crisis.
From vegetative roofs to mass timber buildings to advanced solar panel technology, the green building space is evolving rapidly. The green building concept itself isn’t new, but new technology, materials, and construction methods bring unforeseen risks, according to Alicia Pavelko, head of construction innovation and sustainability at Zurich North America.
“The vast majority of the new ‘sustainable’ or ‘green energy’ production plants being built are utilizing new and emerging technology,” she says. “The underwriters and carriers do not have the luxury of years of rigorous testing and use to see how the product performs and what delineates a good versus a bad risk.”
Purchasing building materials ahead of time is another resourceful way for builders to cut costs. Even if a project isn’t immediately in the works, ordering needed materials in advance at a fixed price can help avoid future price increases resulting from inflation. The cost of storing materials now is likely to be less than that of purchasing them in the months ahead.
Implementing modern construction techniques can also help mitigate inflation. Implementing modern techniques, such as building components of the structure in a factory, can help reduce the pain of inflation. Since all components are transported from one place, transportation costs are dramatically reduced. A contractor with a proclivity for efficiency and reducing waste throughout each stage of the project can also be of tremendous value when it comes to keeping expenses down.
Looking Ahead
Chances are inflation and cost increases to office and home building projects are not going away anytime soon. As a result, designers, contractors and renovators must find innovative ways to cut costs at all stages and stay within budget. Careful planning, flexibility, and a willingness to explore non-conventional building materials, can help reduce inflation risks for ground-up, build-out and renovation projects.
By Slawomir Platta, Guest Columnist
Slawomir Platta is founding partner of The Platta Law Firm in New York City, which specializes in personal injury cases.Also Read