Life Sciences U.S. Fit-Out Cost Guide 2023

DEMAND FOR SUPPLIES CONTINUES TO IMPACT PROJECT TIMELINES

Residential construction was a significant source of competition for materials early in the pandemic. However, increasing interest rates have significantly curtailed residential construction, which dropped 25% during the first six months of 2023, according to Dodge Construction Network (DCN). Increased competition for materials has emerged from the public sector due to a large influx of government funds focused on construction. Infrastructure construction increased 29% year-to-date as of June 2023, according to DCN.

Beyond industry and government funding, efforts to transition to net-zero emissions have increased competition for electrical materials. Components such as electrical switchgear have delays that can extend more than 60 weeks. These delays in critical components continue to add upward pressure to construction project timelines. Cushman & Wakefield surveyed 72 general contractors (GCs) during the winter of 2023. When asked about their sentiment on material lead times, 70% of GCs felt that lead times had increased slightly (31%) or significantly (39%) in the preceding six months. Looking forward six months, that sentiment improved to 56% believing lead times would increase with 43% expecting slight increases and only 13% expecting significant increases in material lead times. Although that sentiment represented improvement, material lead times were already extended. Therefore, even a slight increase represents ongoing delays expected on extended timelines.

READ MORE: NAVIGATING CONTINUED CHALLENGES FOR LIFE SCIENCES PROJECTS

KEY TAKEAWAY

Material delays continue to impact project timelines, and an increase in infrastructure and net-zero projects has emerged as an additional source of demand for key components.

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Cushman & Wakefield