The people who manage construction for Baltimore's public universities are getting used to cost-cutting on the fly - changing roofing, flooring, even the design of the building itself in a mad race against time.
It's been nearly three years since building costs began shooting up unusually quickly nationwide, pinching future owners and their contractors alike. And they're not seeing relief yet.
"It's been difficult," said Ron Brown, associate director for architecture, engineering and construction at the University of Maryland, Baltimore, who handles projects at institutions across the metro area. "When costs go up, you either find a way to do things smarter, or you buy less."
A drop in oil prices this fall helped, because petroleum fuels the trucks that move the products and is also a key ingredient in some of the products themselves, such as asphalt.
But a federal index tracking the wholesale cost of construction materials and components still jumped 6 1/2 percent in the past year, far outpacing inflation, said Ken Simonson, chief economist for Associated General Contractors of America. Brown, who has seen price estimates jump 25 to 30 percent in the past two years, says the true escalation nowadays is in the double digits.
Simonson doubts the problem will fade soon, even with homebuilders hitting the brakes. U.S. nonresidential construction is going strong, he said, and must compete with China and other fast-developing countries for materials.
In Baltimore, where nonresidential construction is particularly robust, local industry leaders gathered yesterday to strategize ways to cope. Even if building material costs stop rising so quickly and unpredictably, construction employers have another headache: labor shortages. They fear that will worsen when demand spikes for new buildings in the next few years to handle the thousands of jobs expected to come to the region with the national military base consolidation.
"Construction has to be built here - we can't outsource it," said Thomas P. McCracken, vice president of Henry H. Lewis Contractors LLC and a panelist at yesterday's event, sponsored in part by the local chapters of the Associated Builders and Contractors and the American Institute of Architects. "We need more skilled labor, and it's very difficult to get."
Managers are in short supply, too, pushing up salaries. "Headhunters are running rampant through the streets," McCracken said.
