Americas Fit-Out Cost Guide 2022

C U S H M A N & WA K E F I E L D

KEY TAKEAWAY Expectations for future costs remain elevated with 96% of respondents expecting their supplier costs to increase further in the next six months. ENR building cost index growth is expected to decelerate in 2022, but not return to a normal historical range (between 2% and 4%) until 2024.

OVERWHELMINGLY, CONSTRUCTION CONTRACTORS EXPECT SUPPLIER PRICES TO INCREASE OVER THE NEXT SIX MONTHS Cushman & Wakefield Construction Contractor Sentiment Survey, Winter 2022

Decreased Significantly Decreased Slightly No Change Increased Slightly Increased Significantly

100%

13%

14%

34% 32%

80%

5%

50%

60%

70%

40%

46%

64%

20%

36%

11%

CONSTRUCTION COSTS In addition to delays in timing, costs have been on the rise as well. C&W’s builder sentiment survey illustrates these costs felt throughout the industry. Almost all (98%) surveyed contractors indicated their supplier costs increased in the past six months, and 85% of contractors had raised their prices since the middle of last year. Construction and building cost indices increased by 8.2% and 13.6% YoY in 2021. These were both fourfold the previous year’s growth rates (1.9% and 3.4%, respectively). 9 The building cost index—which doesn’t include labor costs—grew at a higher rate indicating the inflationary pressure on building materials has been greater than on wage labor over the past year.

14%

0%

General Contractors

GC's Suppliers

General Contractors

GC's Suppliers

Past 6 Months

Next 6 Months

Source: Cushman & Wakefield Research

BUILDING COST INDEX INCREASES BY 14% IN 2021 ENR Building Cost Index

16%

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

14%

12%

10%

8%

6%

4%

2%

0%

-2%

2011

2017

2013

2012

2021

2015

2018

2016

2019

2014

2010

2023

2022

2025

2024

2007

2020

2008

2006

2009

Recession

Building Cost Index

Source: Engineering News Record (ENR) (McGraw-Hill); Moody’s Analytics Forecasted

9

CUSHMAN & WAKEFIELD