Rising Construction Costs ​​- How Does the Industry Cope?



Construction costs have continued to rise in New York City at a rate of roughly 5% for the past two years, keeping the City the highest cost of construction market in the nation according to the New York Building Congress (NYBC)’s annual report Construction Outlook Update: New York City Construction Costs (February 2019). The NYBC attributes the increase to multiple factors with materials and labor at the forefront.

Still, NYBC President and CEO Carlo A. Scissura, Esq. takes a highly positive outlook saying, “The rewards have never been greater.” In Scissura’s February 12 column in Commercial Observer, “Peak Construction? Are You Nuts?!” he notes, “…We can safely say that the state of New York City’s construction activity remains strong” and that planned work “is astonishing,” promising a bright future.​​ SKYlines asked: How is your company coping with the industry’s rising costs and finding ways to realize the rewards? TINA NOCERA

DIRECTOR OF CULTURE, EXTECH BUILDING MATERIALS:


At Extech Building Materials, we look to reduce our transaction cost, making it easier to do business with us, but not at the risk of compromising service. The path to efficiency happens when we first recognize the need for change, and then focus on the behaviors we want from people, and design the work environment to foster those behaviors. We accomplish this by focusing on our culture which will create lasting change and pave the way for the use of technology which helps directly reduce the cost of doing business. QADIR NADEM

WATERPROOFING MANAGER, NEW CASTLE BUILDING PRODUCTS:


The cost of materials is rising 3% to 5% annually, and with some products even more – as high as 10%. We cannot control price increases, but it helps when the manufacturer notifies us of the increase ahead of time. We e-blast and call our customers as soon as we learn of a price increase and advise them to plan accordingly. Sometimes they’ll be able to buy the material(s) before the increase. Communication and having a good relationship with our customers are very important to us. We operate like a partnership. We always keep the lines of communication open so customers know they can trust us.

JACK TERRANOVA

DIRECTOR OF PURCHASING AND LOGISTICS, ANDROMEDA ADVANTAGE:


Director of Purchasing and Logistics, Andromeda Advantage: We are seeing an increase in materials costs every year, varying from 5% to 8% depending on the manufacturer and if they are passing on an increase from the prior year. We systematically research the market and we offset hikes by being able to buy in bulk and to stock materials and consumables in large quantities, passing on the savings to the companies we service. We also purchase from vendors who can ship items directly from the manufacturer, thus saving in shipping costs.



The views and/or opinions contained within are those of the drafter and may not reflect the views and/or opinions of Skyline Restoration Inc.

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