Craft Your Budget with Rising Church Construction Costs in Mind

Rising costsThere are multiple factors that influence the construction of a new church building or the process of a significant church renovation. Visioning, planning, budgeting, financing, and many more elements will impact the progress of your building project.

In this post, we want to add another to the list: church construction costs.

Understanding Church Construction Costs

You might think that constructing a church building would not be impacted by the ebb and flow of construction in other sectors, but that’s simply not true. For example, last year skilled labor was in short supply due to greatly increased industry activity. This made it more expensive to hire qualified labor, thus raising overall church construction costs.

This year we are facing increases in the price of many basic building materials, which are used in the construction of both residential housing and church building projects. For example, gypsum prices rose 5.3 percent in February. Gypsum is a non-combustible mineral that is ground into a powder and becomes the center of “gypsum board,” the standard material used for walls and ceilings in just about any building or renovation project.

Another contributor to rising church construction costs is a lumber trade dispute between the U.S. and Canada. This has resulted in a one-month increase of 4.8 percent in the price of softwood lumber, while costs of other types of lumber have risen by as much as 30 percent.

Items such as particle board and concrete are also rising in price, probably due to an increase in demand thanks to the ongoing residential construction boom.

Understanding the Church Building Planning Process

What do these church construction costs mean for your project? Let’s start by talking about the planning and budgeting process.

Church construction projects are not conceived in one week and begun the next. First, a need is observed and discussions are held to develop a church vision. Committees or teams are formed to study various issues and propose solutions, then develop a budget and timeline to implement those solutions.

But once you have your solutions, budget, and timeline, you still are not ready to put a shovel in the ground.

Your next step is to secure funds. This will probably entail a special fundraising campaign. Drawings and engineering specs must be completed so you can request permits from appropriate local agencies. Only once funds are in place and permits are granted can you finally begin to build.

Understanding the Impact of Inflation and Rising Costs

On average, about 18 to 24 months will elapse between the time you begin to identify your church vision and needs and the moment you finally start actual construction.

During this time, the budget requirements you envisioned a year or two ago may have changed. For example, a 2017 church building project envisioned two years ago could be impacted by both the labor and materials increases outlined above.

In fact, in the 47 years The McKnight Group has been building churches, we have consistently seen construction inflation outpace consumer inflation every year, except for the recession of 2008-2009. This means that if your budget is two years old by the time the first shovel hits the ground, you can expect your church construction costs to have increased by 10 percent from your original estimates.

Plan Now—and Take Action

Yes, this is not easy news to receive. We believe the lesson is this: No one knows with certainty what inflation is going to be in any given year. What we do know is that prices are on the rise and you need to make sure you are planning accordingly.

If your church is sensing a need and seeking solutions, don’t procrastinate. Begin the conversations. And feel free to contact us for assistance in thinking through the first steps of your church building or renovation project.

Also, don’t miss our ongoing i3 webinar series, which will provide additional support for you and your fellow church leaders as you consider a renovation or new building project. Simply visit our website and sign up—they’re absolutely free, so you have nothing to lose.

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