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
| May 3, 2012
OSHA reduces fines in Cincinnati casino collapse
The Occupational Safety and Health Administration has reduced the number of violations from four to two against four firms it cited earlier this month in the collapse of a casino under construction in Cincinnati.
| May 3, 2012
New York City implements controversial crane licensing requirements
New York City officials announced strict new licensing and testing requirements for all crane operators in New York City to raise safety standards.
| May 3, 2012
Green-roof requirement now includes industrial facilities in Toronto
A mandate that requires installation of green roofs on new commercial and residential buildings in Toronto has been expanded to include industrial facilities.
| May 3, 2012
Innovative wastewater treatment helps achieve LEED rating
LEED for New Construction, Neighborhood Development and the LEED Volume Program offer some ways to achieve LEED points when dealing with wastewater treatment.
| Apr 26, 2012
Lack of bolts on steel support caused collapse at Cincinnati casino
Too few bolts connecting horizontal steel support beams with vertical steel columns was the cause of January’s construction accident at Horseshoe Casino Cincinnati, according to the report of the Occupational Safety and Health Administration.
| Apr 26, 2012
OSHA criticized for taking too long to roll out safety rules
The Occupational Safety and Health Administration takes far too long to adopt new safety regulations compared to other agencies’ development of rules, safety experts said during a Senate hearing.
| Apr 26, 2012
Contractors fear that GSA scandal will lead to fewer federal construction contracts
In the wake of the recent scandal at the General Services Administration in which workers spent lavishly at a Las Vegas conference, a spokesman for Associated General Contractors of America said contractors are worried the scandal will result in cuts to GSA's construction and renovation budgets.
| Apr 26, 2012
Developers can use LEED wastewater credits to help gain approvals in environmentally sensitive locales
Those wanting to pursue development in heavily regulated and environmentally sensitive areas are benefiting by designing projects that qualify for LEED points, even if the project as a whole does not achieve certification.
| Apr 26, 2012
New York City Council moves to license elevator mechanics
New York’s City Council introduced a measure last week that would require the city’s 7,000 elevator mechanics to meet national standards and be licensed by the city.