Tough Times, Silver Lining: Builders Lower Their Bids
Now is a great time for colleges to get bids on construction projects — if they have the money to pay for them.
Over the past several years, colleges have endured eye-popping escalation in the cost of campus construction, with the budgets swelling by more than 40 percent in some cases. The increases resulted from similarly rising costs for energy and petroleum-based building materials, and from growing demand for staples like steel and cement amid a booming construction market, both overseas and in the United States. Construction firms consistently bid high because of the demand for their work and to cover the risk of escalating costs on materials.
But times have changed. As the financial, housing, and major-construction markets have headed toward meltdowns, those same construction firms are looking for jobs, even while the prices of energy and materials have fallen. The prices of essential construction materials like structural steel, cement, and lumber are all expected to decline through 2009, according to Engineering News-Record, a trade magazine for the construction industry, published by McGraw-Hill. Because of those declines, building costs are likely to go down slightly this year.
