Saturday, February 21, 2009

Cutting construction costs is now crucial

From the NY Observer:

In recent months, talk of reducing costs has dominated the efforts of union and contractor leaders, as both have been seeking a citywide agreement to cut the high labor costs through streamlining. The next few weeks will likely prove critical in this effort, as many involved in discussions say unions and contractors are aiming to reach an accord on cost-cutting measures for a handful of major projects in the city that risk delay.

The level of construction in New York is soon to drop off a cliff, a plunge that will leave many a contractor and union member desperate for work. While construction is still at relatively high levels as projects move toward completion, the economic collapse and accompanying credit freeze has dried up the once plentiful well of new work, as even those developers still willing to build apartment towers cannot find banks willing to lend.

All corners of the industry are eager to see work continue, so numerous groups have come together to hone in on one main factor that is within their control: the cost of labor.

Labor can comprise about 50 percent of the cost of a construction job, so developers have warned that without major drops in costs—25 percent is the target—those few current projects on the books may have to be scrapped.

5 comments:

Snake Plissskin said...

The industry from architects to contractors need to keep their teams intact. They must have a continual line of future contracts.

Even a little idleness forces staff and employees to look for employment elsewhere. Your team that you spent years building, your very organization can melt overnight.

The machine must march forward for if its stops, it will quickly fall apart.

Missing Foundation said...

Like the Imperial AT AT Walkers from Star Wars, a little sand in their plans is all it takes to bring a big one down.

Either march or die. That is their biggest problem. You can only go so far before you reach the ends of the earth.

Then the whole damn thing implodes.

Taxpayer said...

What steps had DOB IMPLEMENTED to inspect every knows element that can be used to cut costs?

Concrete, steel & iron, electrical, foundation, structural supports, roofing?

Each is traditionally eyed as a means to cut corners and keeps costs down.

How many more collapses and deaths (I know, I know, the Commissar couldn't care less about deaths from his negligence - CODB) will occur before the Commissar and DOB do their job?

As the number of construction activities declines, DOB has plenty of inspectors to intensely inspect and prevent death.

CODB = Cost of Doing Business.

Anonymous said...

"the economic collapse and accompanying credit freeze has dried up the once plentiful well of new work, as even those developers still willing to build apartment towers cannot find banks willing to lend."

This is THE CAUSE of the problem. New York DOES NOT NEED MORE LUXURY CONDO'S filled with the greedy rich.

The whole thing was a bubble, vapor, unreal numbers, don't you get it by now?

IT WAS UNSUSTAINABLE.

IT CANNOT CONTINUE.

Anonymous said...

Like the Biblical Tower of Babel
the industry is toppling!

And the bigger they come...
the harder they fall!

There are a lot of big egos out there that could use some deflating!