Construction Trends Analysis

On a regular basis, we comment on and analyze the data from Reed Construction Data. Here is our take on the August Construction Materials price trends from Reed.

In the June report it was projected that the annual rate of increase would be 8%. This latest report reflects a rate of 6%. We noticed the large jumps in steel (4.1%) and copper (9.5%) as well as the increasingly important effect that the “weaker dollar” is going to have on imported items. As we remember from economics class, the weaker dollar makes our exported products less expensive resulting in (hopefully) a healthier export market; but, at the same time makes our purchases (imports) from other countries more expensive. This is not a comment on the overall or longer-term impact of the relative health of our economy caused by a weaker dollar. This is mentioned just to point out that the weaker dollar by definition causes our cost of imported goods to go up and most of us are most immediately affected by what it costs us to buy something.

Something else that is not reflected in this report is this issue of inventories. As we have seen recently, inventories are getting low – near a bottom. A couple of quick, practical examples: RTU’s and other HVAC equipment is no longer “off the shelf”. It’s now taking 3-6 weeks longer to get RTU’s that previously took a phone call. Also, electrical switch gear is beginning to be a longer-lead item. Panels and switch gear that was a 1-2 week delivery is now taking twice that. What does that mean? That means those manufacturers are going to have to start producing again – and instead of these items being shipped quickly out of inventory, they are now going to have to be manufactured – thus causing longer lead times and most likely higher prices.

Thanks for reading.

The Sykes Team

The Five Steps: Architecture & Engineering Documents

The next step in the five-step total construction solution process is a key one to the completion of the project: engineering documentation.

In this step you get through these steps so that the project has shape and direction. First you complete the architectural, engineering and construction documents related to:

• Space planning 
• Interior design and decorative finishes
• Plumbing design
• HVAC design
• Lighting design

After the documentation is complete, the following steps take place:

• Review of drawings and documents with the owner
• Identification of site-specific construction requirements
• Solicitation and selection of subcontractor bids

Once this documentation step is complete we can move on to the municipal reviews.

Dave and Kevin

The 5 Steps: Site Analysis

The first of the five steps, site analysis really has to be done before anything else.

Site analysis has to do with understanding the space by doing a site survey and beginning to do the store design.  Budgeting also starts here.

The landlord is contacted to get the basic information on the property lease.  This helps in the budget process and helps determine the extent to which work can be done.

A preliminary construction agreement is drafted and delivered to the owner.  The owner reviews it and signs off.

A site survey is conducted and the details are transcribed for later consumption in the process. A preliminary store layout is put together and the layout is submitted to the landlord for approval.

A preliminary budget is created.

You can't really start without this information and these steps.

Dave

The Five-Step Total Construction Solution

There are five basic steps to take between undeveloped land and an open store.  We've come up with these five steps:

1. Site analysis and design
2. Architecture and engineering documents
3. City plan and building code review
4. General construction
5. Grand opening

We'll briefly talk about each step here.  In later posts we'll go into detail on each step.

Site analysis has to do with understanding the space by doing a site survey and beginning to do the store design.  Budgeting also starts here.

Documentation of all of the major elements (space planning, HVAC, plumbing) is next.  Subcontractors are also identified.

City planning and code review are critical.  You can't proceed between steps without proper permitting.

The grand opening is the culmination of it all. Let the sales begin!

We'll discuss each of these steps in detail in subsequent posts.

Dave