Many commercial projects may face delays in 2018 due to rising demand, particularly for warehouse and office space. A shortage of skilled construction workers and rising construction costs—two items that are also plaguing the residential market—are expected to push back timetables on many commercial projects in the pipeline, according to the CoStar Group.
The labor shortage may mean developers will have to pay more to get their buildings constructed because contractors are able to charge more due to the high demand. The construction field had 381,000 job openings in October, the largest number of openings in a 17-year tracking period, according to the Bureau of Labor Statistics. There are 11 percent fewer construction workers today than prior to the last recession.
The average length of construction delays in the multifamily sector could increase to four months by the end of 2018, according to CoStar’s forecasts.
Source: “Rising Costs, Labor Shortage May Add to Commercial Construction Delays in Coming Year,” CoStar Group (Jan. 4, 2018)
