I’ve noticed a lot of new construction activity around the Phoenix Valley, like in the Eastmark communities in Mesa on east side, and Buckeye’s Verado development on the west side. It’s great to see some of the formerly abandoned construction sites moving along again as well. ~Bill
Arizona bucks national construction cost increase trend, but labor shortage remains
by Eric Jay TollReporter- Phoenix Business Journal
Construction costs across Arizona have gone up, just not as much as in other places across the country.
That’s according to a quarterly look at construction costs from Rider Leveltt Bucknall, which found construction costs rise at an annualized rate of 4.64 percent overall, while costs rose just 3.6 percent in metro Phoenix.
However, Arizona contractors are not seeing that construction cost jump.
RLB projects that rising construction costs are driven by a smaller construction industry. Busy areas, according to RLB’s analysis, have greater cost issues.
Not so in Arizona. Reductions in construction labor force have plagued the construction industry, but the demand for new projects has not rebounded.
“We’re just kind of bumping along on the bottom of the recovery,” said Mark Minter, executive officer of the Arizona Building Alliance. “Our members are optimistic about the fourth quarter this year. They’re starting to see increased activity that will happen then.”
Ed Zito, president of Alliance Bank of Arizona, said that he’s seeing across-the-board activity that will lead to new development. “The second half of the year looks like things will be picking up,” he said. “Residential and commercial are not seeing major cost increases.”
Two out-of-state developers are taking advantage of the stable costs and making major development commitments in the Valley. One from Texas, one from the Midwest, and neither have undo concerns with construction costs or available labor.
Arizona construction costs are holding steady, according to Minter. “We’ve seen big cost declines in energy-related costs. Diesel and gasoline fuels prices are low, and cost for materials that require a lot of energy, like glass, are also down,” he said. “I don’t think that’s going to last, as oil prices can’t stay this low.” – original article –
