Labor shortage increases costs of Phoenix contractors, engineers and architects

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Construction activity is robust in the Phoenix market, and is expected to continue through at least the first half of 2018 based on current forecasts. Office, industrial and multifamily development is at an all-time high, and there are many new ground-up, build-to-suit projects underway throughout the Valley.

The Southeast Valley and Scottsdale have seen significant activity, especially within office properties. As older buildings trade hands and are forced to add capital improvements to compete, project management services are in demand along with Construction activity is robust in the Phoenix market, and is expected to continue through at least the first half of 2018 based on current forecasts. Office, industrial and multifamily development is at an all-time high, and there are many new ground-up, build-to-suit projects underway throughout the Valley.

The Southeast Valley and Scottsdale have seen significant activity, especially within office properties. As older buildings trade hands and are forced to add capital improvements to compete, project management services are in demand along with brokerage and property management.

As a result of this uptick in activity, general contractors and subcontractors have increased costs due to a shortage of available labor. For the first time, engineering and architectural costs are also increasing as well, for the same reasons. While material costs have been stable, an uptick is anticipated in the coming months. With that being said, construction fees are still much less than what our western counterparts are experiencing in Los Angeles and San Francisco.

To learn more about construction trends in the U.S., download our Q2 2017 U.S. Construction Outlook.

 

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