Each year, we update our blog readers on the costs of a typical church building construction project along with the factors that affect pricing a church design. From our perspective, doing this for 2022 requires less of an update and more of a reboot.
We all know that costs are rising with inflation, yet how much the cost of construction has increased in recent months has surprised even us. There are many factors behind the increase, but this post will focus on the three primary ones: the supply chain, labor shortage, and inflation.
How Supply Chain Issues Impact Church Building Projects
Americans became aware of supply chain issues at the start of the COVID-19 pandemic, as everyone scrambled to stock up on toilet paper. But toilet paper wasn’t the only thing in short supply.
Very quickly, supply chain problems began to impact various types of industry, especially construction. Metals were scarce. Chemicals used to make certain types of products became difficult to find. Microprocessors that drive all kinds of church building products, from HVAC to audio – visual and security systems, were no longer available.
Toilet paper and other household products are back on the shelves, but construction materials remain in short supply. Our President, David McKnight has seen material shortages like this before. He is reminded of his experiences building in the mission field and growing up with missionaries staying at his home frequently: when materials are short, you have to wait a long time for what you need. It is very likely these supply chain problems are not going to correct themselves anytime soon. Church leaders must expect a church facility to take longer to build, and for products to cost more, for years to come.
The Labor Shortage and Church Building Construction
Next, let’s review the specifics of the construction labor market. There is already more work that there are workers available. Currently, there are over 300,000 unfilled construction jobs in America. Additionally, a new study shows that 1.5 million skilled construction workers are planning to retire in 2022, yet only an estimated 900,000 people are available to fill these skilled positions.
This also means construction workers with 30 years of experience are being replaced with newly trained laborers who have little experience in the field. Construction production rates will go down while these workers learn, plus the industry will still be short 900,000 workers (600k due to retirement, and another 300k needed to fill current openings). The result is the same as with supply chain issues: expect your church facility to take longer to build, and for products to cost more, for years to come.
The Effect of Inflation on Your Church Design
Discussing inflation in terms of percentages seems inadequate. Prior to 2020, construction inflation had been running consistently around 5% for several years, while overall inflation was 2–3%. During that time, the government printed trillions of dollars in COVID-19 relief and now the bill is coming due.
For example, we have seen huge increases in the cost of steel. Before 2020, we would quote to church leaders, with a good degree of accuracy, that the structural steel phase of church building construction would cost between $10–$15 per square foot. Today, we are praying that the same structural steel phase will not rise beyond $30–$35 per square foot! Obviously, that cost increase is a game-changer for any church design. Admittedly, steel is a component that has increased most drastically, but all phases of a church building project have experienced significant inflationary increases.
We constantly remind church leaders that there are four phases to a church building project: site work, plans and permit fees, building construction, and furniture and equipment. In 2020, we told church leaders to plan on spending $200–$250 per square foot for all four phases of their project. In spring 2022, we are looking at $275–$325 per square foot—but we don’t know how long these numbers will remain accurate.
So, What Can Church Leaders Do?
We recommend you do not wait, hoping that prices will reverse. That will not happen to any significant degree. Start planning your project now and expect it to take longer to build. Meanwhile, take care of your existing church building. Stay up on maintenance. Many smaller churches will need to consider other options beyond a new building. Be creative in looking for options.
Finally, always remember to seek God’s guidance for both answers and resources. Your church vision will not be held back because buildings cost more and take longer to construct. Remember also that we are with you in these challenging times. Our free i3 webinars keep you updated on the latest in church design and construction information, so register today for our upcoming webinars.