Rising Commodity Costs Hinder Hospital Construction
Worldwide commodity prices, from oil to many metals to cement, have increased markedly over the past years, among other things because of sustained demand growth from China. The Birmingham Business Journal points out that this trend takes its toll on health-care construction costs. Among the many projects that together compound to a hospital building boom, Vanderbilt University Medical Center is for instance forecasting a cost of $322 per square foot for its $234 million bed tower project. The project has its own technical constraints but they don’t explain alone why the price-to-surface ratio ends up at a significantly higher point than the regional average.
The cost for hospital construction averages between $265 and $275 per square foot throughout the U.S., up from less than $100 in 1995. Two years ago the New York Times mentioned costs upwards of $450 per square foot in California because of the added cost of quake resilience. Mike Hunt, senior vice president and director of preconstruction at the Nashville office of contractor R.J. Griffin & Co., estimates construction cost increases at around 8 percent per year since 2004. The Katrina hurricane made inflation worse in the South by shutting down concrete inflows through New Orleans’ port and by increasing demand for contractors, to the point where some hospital extension programs get cancelled.
August 25, 2006 Related topics: Facilities