Rising material costs impact construction industry

San Diego’s building boom is at risk of a slowdown as material costs increase. Construction materials, such as steel and aluminum, continue to rise in price due tariff percentages. According to the San Diego Union Tribune, construction projects may see additional costs this year, up to millions. Besides prices and upfront costs, the industry is seeing a shortage of skilled workers.

If material prices keep rising, future projects might face dilemmas or cancellations.

Possible implications

Builders and developers across the country are experiencing construction booms. The future hints at similar industry challenges, affecting various states. The most urgent issue points to lack of skilled workers. While contractors are getting by with current projects, this shortage could lead to consequences down the road.

A Q3 2018 Commercial Construction index report revealed that 80 percent of respondents were moderately to highly concerned about safety risks relating to unskilled workers on project sites. The rising cost of materials may also translate into higher housing costs for renters and real estate buyers.

Rising material costs and a decrease in skilled workers could mean disaster for contractors, project owners and construction businesses. Such factors can affect a company’s liability rates, as well as spur potential defect claims.

It’s important that construction companies adequately educate and train employees to decrease the risk of accidents and mistakes. Some companies are turning to technology as a new approach to the building process. However, disputes and challenges are not always preventable. When this happens, seeking legal guidance might be the next step.