George Cullen, co-president of general contracting firm JP Cullen, joins BizTimes associate editor Arthur Thomas to discuss inflation and supply chain challenges in the construction industry. In addition to sharing examples of specific items that are rising in cost or hard to get, Cullen also described how the company is working with owners considering projects.
“There’s a reason why you’re doing the building and there’s a value that doing that building will accomplish for you and it will, in many cases, deliver revenue back to you, profitability back to you,” Cullen said.
He said industry research suggests it is unlikely material prices will fall down below where they were prior to the current run of inflation. It has only happened once, which was around the Great Recession.
“We expect that rise in costs to slow down, but they’re not going to return to where they were before,” Cullen said.
Instead, he suggested building owners and developers need to be even more conscious about making the financials of a project make sense, controlling costs and working to make informed decisions. It might mean choosing more economic carpet or getting creative about exterior materials to find ones that are easy to get.
Some of the challenges Cullen has seen include metal deck that typical costs $5 per square foot now going for $13, pre-cast concrete that normally takes six to eight months now taking 12 or 13, a lack of availability of joist and deck, brought on by the boom in Amazon distribution centers, and having to save old doors on remodeling projects to reinstall them temporarily while waiting for new ones to arrive.
Cullen discusses strategies for navigating some of these challenges and the need for a collaborative approach to make projects successful.
