Over the past few years, the construction industry has seen a dramatic increase in the costs of materials, ultimately resulting in decreased profits. As a matter of fact, Singapore saw the highest rate of increase in construction costs last year at 12%. Unfortunately, as the industry continues to face skills capacity issues and high material and labor expenses, architecture firms in Singapore can expect construction costs to remain high in the years to come.

According to industry experts, the prices of construction materials may fluctuate seasonally due to an array of factors, ranging from increased construction activity to natural disasters. However, despite all this, residential and commercial interior architecture companies need to procure materials to complete their projects. There is no other way around this reality, so they must instead look for ways to lessen the impact of price increases and protect their profits.

For the most part, rising construction costs are beyond your control. Usually, the only solution you have at your disposal is to find more effective ways to manage waste and materials. Below, let us go into some expert pieces of advice on how homeowners, business owners, and commercial and residential architects in Singapore can stay ahead of the construction cost crisis.

 

1. Make room for price fluctuations in the estimate

There is a risk that takes place as a result of the variation in timing from a contractual signing to the actual purchases of materials and cash flows during a construction project. It is common for materials to be procured months or years after the project’s inception. As such, you should consider examining the costs of materials year over year to determine what their average price hike is.

This figure, together with a buffer, is then added to the costs of materials in all future estimates to make sure that the price fluctuations are accounted for. This is specifically necessary for projects that last longer than a year since you can expect to see total material cost increases of 3% to 12% from year to year. For instance, a project with material costs of $700,000 and a duration of 2 years can expect to see increases in material price ranging from $42,000 to $168,000.

 

2. Optimize resource management

In order to reduce construction costs and maximize profits, it is necessary to track and monitor your material burn rate, as this allows you to begin pre-planning and buying materials ahead of time, ultimately conquering those price hikes before they even take effect. Thus, you need to constantly analyze the market conditions and keep in touch with your suppliers to make sure that there are no unforeseen increases coming your way.

Among the best ways to attain the necessary level of structure and organization to deploy and control your resources is to utilize Labor and Material management software. This type of software can enable you to not just track inventory but also to keep an extensive history of past prices. You may then use such data to come up with even more precise and profitable estimates.

 

3. Consider prefabrication

Prefabrication is an excellent tool that enables you to reduce waste and operate more efficiently. The term ‘prefabrication’ basically refers to the process of assembling a structure’s components in a factory or other manufacturing facilities and transporting sub-assemblies or complete assemblies to the construction site where the structure is to be built. When making use of a prefabricated component for a construction project, there is little to zero waste generated since the material is designed offsite.

Additionally, what is good about off-site fabrication is that it minimizes the cost of labor, which then allows you to further mitigate the effect of the rising construction material costs. More often than not, it costs way less to transport, store, and organize partial assemblies for installation. Even when you increase the labor force and production expense on projects, the cost related to labor lessens due to prefabricated materials.

 

4. Implement lean construction

Lean construction is popular among many architecture firms because, as it turns out, the use of lean construction can minimize material waste by about 64%. Lean construction is essentially a project delivery process that employs Lean methods of maximizing stakeholder value while lessening waste. It seeks to improve construction processes and end-to-end design through Lean principles and practices, which combine operational research and practical development.

The implementation of lean construction means less waste and more profits for owners, contractors, engineers, and architects.

 

Conclusion

The rise in the prices for construction materials undoubtedly has a significant impact on homeowners, business owners, contractors, engineers, and architects. This will not only affect the affordability of houses and commercial buildings but will also reduce the profits of construction companies. Fortunately, there are a few effective strategies you can employ to mitigate construction cost increases. These strategies are simple but are sure to help you stay on top of your game in construction.

If you are currently designing a new house or undertaking a landed property project, be sure to hire an architecture firm to help you lessen your overall expenses. Not only will they help you come up with the most impressive residential architecture design in Singapore, but they will also guide you through the specifics of constructing your home to make sure that you get the best value for your money.