Americas Office Fit Out Cost Guide 2023

CONSTRUCTION STARTS RECORD HISTORIC GROWTH DESPITE CHALLENGES Nonresidential building construction starts continued to show strong momentum in 2022 despite persistent cost, material and labor challenges in the industry. Full year 2022 new starts rose 38% YoY based on the Dodge Index. 2 Commercial starts, a component of nonresidential building construction, rose 25% in 2022 YoY. The components of commercial starts include office, industrial, retail and hospitality. Of these, both office—buoyed by data center and lab construction—and hospitality drove growth in 2022 while industrial and retail growth was more subdued. The North American new office construction pipeline fell for the third consecutive year, dropping 9% YoY. Despite the construction pipeline deceleration, current levels are 22% above the long-term, 20-year average. Construction in the sector has been disciplined in both Canada and the U.S. with office under construction as a percent of total inventory, falling 130 and 93 basis points, respectively, since Q1 2020.

One of the key construction storylines for 2022 was the return of enthusiasm and optimism in prospects for nonresidential growth … increased data centers, labs, and healthcare buildings will provide a solid floor for the construction sector. – Dodge Data & Analytics 3 demand for some building types like

VALUE OF NEW CONSTRUCTION STARTS: NON-RESIDENTIAL BUILDINGS, 12-MONTH TRAILING AVERAGE

$125 $150 $175 $200 $225 $250 $275 $300 $325 $350 $375 $400 $425

Billions USD, SAAR

2011

2017

2021

2012

2015

2013

2018

2016

2019

2014

2010

2022

2007

2020

2002

2005

2003

2008

2006

2009

2004

Source: Dodge Data & Analytics: New Construction Starts Report

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