Construction Cost

The U.S. economy continued growing at a healthy rate in 2015, adding approximately 221,000 jobs per month over the year. Wage and profit increases in the construction sector are expected to pull new entrants into the labor force with some restructuring from other sectors of the economy, for example energy and exports. Construction prices increased nationally, trending toward 8 percent, depending on location.

Construction Costs

The University of Cambridge is planning to build a $125 million biomedical research facility in the United Kingdom. The six-story, 190,000-sf Project Capella will house the Cambridge Stem Cell Institute, the Milner Therapeutics Institute, the Cambridge Institute of Therapeutic Immunology & Infectious Disease, and the Cambridge Centre for Haematopoiesis and Haematological Malignancies. Lean construction methodology will be implemented in the delivery of the facility, which is slated for completion in the second quarter of 2018.

Complex technology, expanding program, and increasingly specialized and segmented roles and responsibilities often create a disconnect in the process of designing and building sophisticated facilities. The result can be a research or diagnostic lab or high-containment animal building that becomes a burden to the owner, whether because it hasn’t been right-sized, is not energy efficient, or operates with sub-par reliability. The solution is to assign someone the task of aligning design decisions with the building’s ultimate scientific mission.

The Pennsylvania State University's Health and Human Development Building was awarded the 2015 Gold Project Leadership Award in November of 2015 by the Construction Owners Association of America (COAA). Completed in summer of 2015, the structure was the second building of a two-phase expansion of the College of Health and Human Development, collocating several research centers near the main academic departments.

Decreases in energy and commodity prices have driven growth and pricing increases in the non-residential construction market and other sectors of the economy. Year-over-year non-residential construction growth is currently at 25 percent. Combined with a total volume growth of 17 percent in 2014, the sector is approaching a 52 percent rebound in spending from its most recent bottom. Price increases for 2015 are trending toward 8 percent, depending on location.

The siting of sensitive instruments in a research facility requires awareness of the electromagnetic field (EMF) environment and the various types and locations of emission sources. Some of the most difficult electromagnetic interference (EMI) challenges include DC and geomagnetic sources such as cars, trucks, subways, and trains, as well as facility elevators. The EMI footprint from the movement of an elevator through the earth’s magnetic field can exclude large areas of a facility from housing sensitive tools and instruments.

Baylor Scott & White opened its Marble Falls Medical Center in August of 2015. The 188,000-sf acute care hospital will provide primary care, general surgery, and a comprehensive array of medical specialties. The 46-bed medical center houses an eight-bed intensive care unit, two operating suites, and a birthing center. The project was designed for ease of expansion to enable the build-out of two additional operating suites, four ICU beds, and 30 medical-surgical beds at a later date.

Major economic indicators point to healthy growth for the remainder of 2015. Non-residential construction spending has rebounded nearly 50 percent from its most recent bottom in 2011, with a total volume growth of 17 percent in 2014. Year-over-year growth is currently 21 percent. Though commodity and energy prices were lower in the first quarter of 2015, the construction sector is nearing full employment, which will drive significant wage increases regionally.

Using a phased, core-and-shell strategy to construct the 310,000-gsf Life Science Laboratories (LSL) building allowed the University of Massachusetts Amherst to obtain high-level research space and take advantage of the competitive bid market and economic incentives available in 2010. The approach also provided economies of scale and the advantage of postponing programming and occupancy decisions with subsequent fit-outs.

Iowa State University's transgenic swine facility at Zumwalt Station Farm in Ames received an Award of Distinction from the Modular Building Institute in May of 2015. The 2,904-sf project was designed, manufactured, and installed by Art's Way Scientific. Supporting research on the genetic modification of domestic animals for agricultural and biomedical applications, the standalone facility incorporates biosafety features to protect a closed herd of swine.

Mercy Health System will open the $465 million Mercy Hospital Joplin in March of 2015 in Joplin, Mo. Replacing St. John’s Mercy Regional Medical Center, which was demolished by a tornado, the new hospital was delivered in just 46 months by McCarthy Building Companies using Building Information Modeling (BIM). Completed under budget and in less than half the time of a conventionally built facility, the 890,000-sf Mercy Hospital Joplin comprises a nine-story inpatient tower and a five-story clinical tower.

BluVue announced the release of BluVue Plans 2.0 for iOS and Android in February of 2015. The app allows project teams to have mobile access to current construction plan documents, eliminating the risk of building off of outdated drawings. BluVue Plans also helps construction teams collaborate efficiently on project drawings, giving them the power to view, mark up, and share plans.

Procore Technologies launched a new file storage and synchronization application for construction management in January of 2015. Procore Drive allows teams to share and collaborate on large files without the impediments of FTP clients or other cumbersome file sharing solutions. Designed to increase project efficiency by streamlining communication, the application delivers the speed, security, and scale required by enterprises to collaborate between mobile devices, laptops, and desktop computers.

The $623 million Saint Joseph Hospital opened in Denver in December of 2014. The 831,000-sf facility was built by Mortenson Construction using modular construction methodology, resulting in a savings of 72 work days and $4.3 million, according to a University of Colorado Boulder study. The 400-bed facility features entirely private inpatient rooms, advanced diagnostic imaging suites, and spacious operating rooms. The hospital is owned by SCL Health and jointly operated with National Jewish Health.

Sustained growth over the past 18 months has pushed new construction prices above the long-term trend line for the first time since 2009, according to third-quarter economic data. Capital construction prices are now trending at an annual escalation rate of 4 to 8 percent, depending on region, with northeastern and southern states showing the greatest increase. Regional labor demand is also driving up project bids in midwestern states.