As the owner of a construction business, you may have noticed your bills seemingly getting higher every month. If so, there’s a good reason for that – several types of construction costs appear to be on the rise. Running your business already entails several fixed expenses, from supplies and equipment to covering your payroll to getting Ohio construction insurance to fulfill general contractor insurance requirements. However, the company budget can likely only handle so many upticks in costs before some cuts have to be made. To prepare your budget for the upcoming fiscal year, here are some of the rising construction costs you can expect to see industry-wide.
Several Key Types of Construction Equipment Are Steadily Rising in Price
One area where price tags are likely to creep up over time is construction equipment, a necessity for all construction companies that want to keep up with the competition and employ the latest technology. Heavy machinery and other smaller equipment types are likely to continue taking up a significant chunk of your budget, especially if you plan to upgrade to new pieces of equipment this year. While you might not be able to get around the expense of equipment, you can figure out how much you could afford to spend on equipment per month and match those numbers up with new equipment coming out now. Some essential types of equipment that may be affected, and that you should begin budgeting for early on, may include:
- Company vehicles and dump trucks
- Skid-steer loaders
Labor Costs Currently Appear To Be Fairly Stable
When it comes to current construction costs, it’s thankfully not all doom and gloom. Labor costs, in particular, appear to be fairly stable at the moment, rising slightly in a few hot locales but remaining flat or even dropping in other areas. In particular, only the southern and northeastern regions of the United States are currently experiencing a rise in labor costs. All other areas do not appear to be experiencing significant changes, and if your company is located in the western United States or eastern Canada, you may even see your labor expenses fall in upcoming months. Keep in mind, however, that labor demands and costs are always subject to seasonal effects, so if the summer months bring hot markets, labor costs may still increase.
Increased costs across the construction industry may not seem like much individually but can easily add up and put a strain on tight company budgets juggling payroll, Ohio construction insurance, and more. If your business has been experiencing the squeeze lately, understanding the expenses that are likely to rise in the upcoming fiscal year can help you budget better and prepare to weather the costs. Refer back to this list as you write up your expense sheets, and you’ll be financially prepared to handle industry shifts.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.