2024 Retail Fit Out Cost Guide

To attract labor to the market, construction firms have increased compensation incentives, increasing hourly wages to an average of $34.92 per hour as of December 2023. This reflects a 5.1% increase over December 2022 and is 19% higher than average total private employment wages. Wages and fringe benefits have increased for both open shop and union jobs based on the Q3 2023 ENR report 3 . Across union crafts, electricians experienced the largest increase (+7.2% YOY) in wage and fringe benefits, followed by plumbers (+7.0% YOY) and painters (+6.2% YOY). Wages are expected to increase further in 2024.

GCs seem to be more optimistic about labor costs in the next six months. Based on Cushman & Wakefield’s sentiment survey, a third expect labor costs to decrease slightly in the next six months. This is in marked contrast to our January 2023 survey, in which 67% expected costs to increase slightly (63%) or significantly (4%) and only 1% expected slight decreases. Improved sentiment may be tied to expectations of slack in the labor sector; however, several construction projects were put on hold in the fall due to the lack of available labor. Until this eases, upward pressure on wages will continue.

KEY TAKEAWAY The lack of skilled labor to staff projects continues to be a significant concern. Besides increasing wages and benefit packages to attract talent, the sector is investing in upskilling and programs to attract workers from non-traditional sectors.

Source: Cushman & Wakefield Research

3 https://www.enr.com/economics/quarterly_cost_reports

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Cushman & Wakefield