The Latest Look at Rising Church Building Costs

The Latest Look at Rising Church Building Costs

We’ve posted before about the adage “time is money,” especially as it relates to the construction industry. Here’s another one: “time waits for no one.” Both simply mean that the longer you wait to create a church design and construct your new church building, the more it’s going to cost.

In 2018, we laid out the rising construction costs leading up to that year. Well, it’s been two years and costs continue to rise. Here’s an update on what to expect.

Inflation and the Church Building Process

Since we last wrote about it, there has been no slowdown in rising construction costs. This inflation rate can have a significant impact on your budget and your new church building’s bottom line.

We want to draw attention to the fact that time is a critical factor. It can be a long stretch between your first conversation about needing a new church building or expansion, and the day you dedicate that new building. After all, there are many necessary steps: developing a vision, drafting an appropriate church design, getting everyone in your church on board with the idea, raising funds for the building, securing a loan for the difference between the budget and your cash on hand, obtaining the various permits necessary, carrying out the construction project itself, then finishing it in style, addressing everything from carpeting and furniture to the landscaping. It’s very common for the whole process to take two to three years. The costs at the start of the planning will certainly be lower than the costs at the end of construction.

Inflation and new challenges

According to The Turner Cost Index, construction costs in America increased 4.82% in 2019 and over the last four-year period inflation has averaged around 5% per year.  Of course, the actual numbers in your community will be affected by the pace of construction in your part of the country, but nevertheless we are seeing increases in construction costs everywhere.

In 2019, we experienced a new challenge that contributes to these rising costs: a trade war involving tariffs. Electronics and light fixtures imported from China make up a very high percentage of controls and lighting fixtures used in construction today. The tariffs on Chinese goods increased the price of these items 20 – 30% overnight!

More concerning than tariffs is the construction workforce.  As baby boomers reach retirement age, much of the skilled labor work force is leaving. It’s not being replaced at the same rate. According to a labor study by the business research group Conference Board, since 1995 the number of men aged 16 to 24 in blue collar jobs has dropped by 10%. 

Accompanying this drop is also a slowdown in labor productivity.  Less work getting done in the same amount of time will contribute to rising construction labor costs.

What Does This Mean?

Construction inflation can be substantial, but other factors are playing into the inflation, which will increase the rate in coming years. We’ve said it before, and it’s truer now more than ever. If you’re having conversations in your church, or even just among church leaders, about how your church building is hampering your growth or not meeting your ministry needs, don’t delay. Building a church will take plenty of time, even if you don’t procrastinate, and some elements of the process—like inflation—will always be outside of your control.

Start planning now. Reach out to have a conversation with us and get the process started. The road ahead can take longer than you might anticipate, and construction inflation means that it could also be more costly then you planned.

2020-03-03T20:54:20+00:00 March 3rd, 2020|Budgeting, Church Building, Church Design|