The U.S. trade war with China is having a significant impact on the cost of building materials, as reported in a new study by Turner & Townsend.
New York City building contractors are adding between 5% to 10% onto the total construction costs due to tariffs on the prices of steel, aluminum, and other materials, according to the construction consulting firm. A cost study of a completed 90-story building at the Hudson Yards development showed that if the project was being built now, the cost of the core and shell construction alone would have increased by up to $150 million due to tariffs that are driving price increases on materials.
The company calculates that the cost difference of constructing some supertall buildings in New York could be up to $100 million for buildings with an overall cost of $1-1.5 billion.
Due to increased demand for domestic steel and recent reductions in production of steel made in China, the cost of domestic steel has risen an average of 22.4% over the last year. Turner & Townsend is warning owners that they should add up to a minimum of a 5% cost contingency on the total value of their core and shell steel framed buildings.
Owners should also consider early buyout packages and direct purchase of materials to lock in pricing on items such as steel and curtain wall as early as possible, the firm says.
Related Stories
| Nov 9, 2012
Mayor in Calif. wants to expedite permits for $1B worth of projects
The mayor of San Jose, Calif., plans to issue new construction permits worth an estimated $1 billion in the next six months to spur job creation and create revenue for the city.
| Nov 9, 2012
Jury awards N.Y. roofer $2 million for injuries after construction site fall
A roofing worker from Cortland County, N.Y., has been awarded $2 million in damages due to the injuries he sustained from a 60-foot fall at a dormitory construction site.
| Oct 31, 2012
Investigators look into crane severely damaged by Sandy in Manhattan
Investigators are examining a construction crane collapse atop a $1.5 billion luxury high-rise in midtown Manhattan due to high winds during Hurricane Sandy.
| Oct 31, 2012
Construction error suspected in Miami-Dade College garage collapse
A construction error is the chief suspect in the partial collapse of a parking garage at Miami-Dade College in Doral, FL.
| Oct 31, 2012
New European laws on timber will go into effect in March 2013
A new European Union timber regulation prohibits the “placing on the market of illegally harvested timber or timber products derived from such timber.”
| Oct 31, 2012
MIT models show roofs' capacity for solar energy in Cambridge, Mass.
A new mapping tool from the Massachusetts Institute of Technology and a Boston design firm can calculate rooftops' capacity for solar energy.
| Oct 31, 2012
Demand for living roofs, walls to reach $7.7 billion by 2017
The demand for green roofs and living walls is expected to climb from $5.3 billion in 2011 to $7.7 billion in 2017, according to a report from Lux Research.
| Oct 25, 2012
Philadelphia councilmen move to crack down on contractors working without licenses, permits
Two Philadelphia city councilmen are trying to crack down on the "underground economy" of developers and contractors who work without licenses and permits, pay cash under the table, and operate unsafe job sites.