The adage “time is money” is particularly true in the construction industry, especially when it comes to rising costs. It’s easy to measure the opportunity and actual cost of not using your time productively when the price of church building materials and labor rise during a given period.
We recognize that it takes time and planning to create and execute a successful church design, so it’s very important to understand how construction inflation can impact your plans.
Inflation and the Church Building Process
Rising costs in construction are very real, with little indication of slowing. Already this year, the costs for concrete, insulation, steel, and membrane roofing have all increased. Not only that, but they are increasing at a faster rate than they have in the past few years. This inflation can have a significant impact on your budget and your new church building’s bottom line.
This is where the time factor is critical. It can be a long stretch between your first conversation about needing a new church building or expansion and the day you dedicate that new building. After all, it takes time for all the necessary steps to take place: developing a vision, drafting an appropriate church design, getting everyone in your church on board with the idea, raising funds for the building, securing a loan for the difference between the budget and your cash on hand, obtaining the various permits necessary, carrying out the construction project itself, then finishing it in style, addressing everything from carpeting and furniture to the landscaping.
It’s very common for the whole process to take three years. The costs at the start of the planning will certainly be lower than the costs at the end of construction.
Inflation and Church Building Costs
Let’s look at inflation over the last three-year period we have data on. According to Turner Construction Company, one of the largest contractors in the world, construction costs in America increased 4.92 percent in 2017. That follows an increase of 4.85 percent in 2016 and 4.44 percent in 2015. As a result, in just the past three years construction costs have increased 14.89 percent. (Yes, those numbers might not seem to add up, but this isn’t simple math. There’s a “compounding” effect in inflation, which raises those yearly percentages even more when you consider multiple years at one time.)
In real dollars, this means that if you were planning to build a million-dollar facility in 2015, you actually had to spend $1,148,900 to finish it in 2017. The actual numbers in your community will of course be affected by the pace of construction in your part of the country, but nevertheless we are seeing increases in construction costs everywhere.
What Does This Mean?
As the above example demonstrates, construction inflation can be substantial. If you’re having conversations in your church, or even just among church leaders, about how your church building is hampering your growth or not meeting your ministry needs, don’t delay. Building a church will take plenty of time, even if you don’t procrastinate, and some elements of the process—like inflation—will always be outside of your control.
Start planning now. Reach out to have a conversation with us and get the process started. The road ahead can take longer than you might anticipate, and construction inflation means that it could also cost more than you think.