Economic recovery driving up construction costs

Residential and commercial construction has kicked into high gear in the last year, driving up the price of everything from lumber to labor, as the economy has begun to recover from a recession that started in 2008. For taxpayers throughout the Lowcountry, that's meant schools and a new county jail will cost millions of dollars more than was anticipated when they were initially planned. Grace Beahm/staff

Lowcountry residents will be paying millions more for a new jail and getting fewer frills in the next generation of schools because of rising construction costs rolling across the country as the economy emerges from years of recession.

Dorchester District 2, which is building three new elementary schools and a middle school with $179 million in bonds approved by voters two years ago, was surprised when bids on the first two elementaries came in around $20 million apiece. That was about a third more than originally predicted, forcing the district to cut out upgraded heating and air-conditioning systems, LED lighting, landscaping and some classroom sinks.

"We were quite shocked on bid day because the bids came in higher than expected," said Bob Folkman, Dorchester District 2's capital improvements facilitator.

Construction costs have been on the rise nationally since the housing recovery went into high gear in 2013. The improved housing market has been among the driving forces that have helped the economy emerge from the recession that began in 2008, creating more jobs for electricians, plumbers, carpenters and related manufacturers.

But the higher demand for skilled workers and building materials has driven up the price tags for some public works projects whose costs had been figured when the economy was still struggling.

Dorchester County took a hit recently when bids for its new jail came in about $5 million higher than expected. When planning started in 2012, the building was estimated to cost about $14 million, but the low bid came in at $18.8 million. County Council voted in July to increase the budget rather than try to cut corners.

"Right now everybody's coming out of the gates wanting to build, and that's driving prices up to pre-2009 levels," Folkman said. "That's a big hit on budgets that were developed in 2012."

When Folkman worked for the Pickens County School District during the recession, the opposite was true, even through last year.

"In Pickens, people were taking work just to stay in business," he said. "When I came down here, I was amazed to see how much was being built, and it's been reflected in the prices."

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Economic recovery driving up construction costs