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

LIFE SCIENCES FIT OUT COST GUIDE 2023

sectors relative to Federal Reserve targets. While overall wages are trending down, construction

and mining wages continue to trend up, exceeding the overall wage growth rate.

KEY TAKEAWAY

Both common and skilled labor costs continue to rise, with skilled labor costs growing at a faster pace. A recent ENR survey of construction company CFOs found that higher labor costs are expected to continue into 2024 and are forecasted to surpass 4.8% YoY, significantly higher than pre-pandemic averages. GC sentiment on labor costs improved in Cushman & Wakefield’s 2023 survey over the 2022 survey. In 2022, 87% of GCs surveyed felt that labor costs would increase slightly (71%) or significantly (16%) in the next six months. This fell to 67% of GCs feeling that labor costs would increase slightly (63%) or significantly (4%) in the first six months of 2023. However, given current wage data, that was probably overly optimistic.

Among construction cost components, skilled labor experienced the largest increases in 2023. Wages are expected to continue to increase through 2024, applying upward pressure to costs as the industry struggles to staff projects.

CONSTRUCTION WAGE GROWTH SURPASSES OTHER SECTORS

Construction and mining

Manufacturing

Trade and transportation

Overall

Fed Target

8.0

7.0

6.0

5.0

4.0

3.0

Median Wage Growth (12 month moving average)

2.0

Source: Bureau of Labor Statistics, Federal Reserve Bank of Atlanta

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