Construction and fit-out costs to rise ahead of inflation

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Leading contractors and suppliers specialising in warehouse construction and fittings, have warned that inflation-busting rises in raw materials and utilities are forcing costs to rise well ahead of inflation.’s Chris Berry said: “The industry and our colleagues in Constructashed have been pretty successful in keeping labour and other controllable costs down to almost zero inflation with improved efficiencies and planning. But with worldwide commodity prices rising so fast and utility costs following suit – factors over which we have no control – the outcome could well be costs going up by anything from 7 per cent to 15 per cent, depending on each individual project.

David Smith from Alpine Fire Engineers confirmed that material costs for sprinklers had risen dramatically during 2006 and that new legislation in 2007 would add another twist. “With only one diesel engine supplier currently able to meet the new BS standards, waiting lists are stretching and the cost of compliance could add around £8000 to a twin diesel pumphouse.

“In addition new mandatory water tank standards due in July will add around 30 per cent to tank costs. Roof and mezzanine sprinkler costs are up by 16 per cent and water supplies by 20 per cent, so despite our best efforts, prices are bound to be ahead of general inflation.”

Kevin Louch from Stanford Industrial Concrete Flooring added that they had to absorb a 10 per cent rise in concrete prices and 6 per cent on steel, which will translate to a rise of up to eight per cent.’s Chris Berry concluded on a more optimistic note. “Despite what looks to be a gloomy picture, there are still a number of ways occupiers can control costs by careful planning and taking professional advice. Making sure you have looked at all possible eventualities during the design stage can avoid the extra cost of making changes during construction. With energy costs due to rise even further, investing in high levels of insulation and energy-efficient systems will help cut running costs for decades to come.”

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