There are a number of reasons why modular buildings are up to 20% less costly than conventionally built structures. In this installment we examine the tenth and last reason behind the cost savings associated with modular buildings: ENR’s construction cost index.
Engineering News-Record provides a Construction Cost Index for construction planners. The index provides developers with insight into the construction costs of 20 major metropolitan areas and cities across the United States.
The construction cost index is comprised of local prices for Portland cement, 2 x 4 lumber and the national average price for structural steel in addition to each city’s local union wages and benefits for carpenters, bricklayers and iron workers. ENR’s algorithm provides a baseline cost by city to compare construction cost variances across the country.
Palomar’s initial business plan was to find a good central U.S. location to build our manufacturing facility. Dallas was the ideal location due to its mix of transportation corridors, strong labor market and good selection of local product suppliers. As the construction cost index data shows, Dallas benefits from the lowest costs of any major metropolitan area; nearly half or a third as much as many of the cities tracked on the ENR index. Needless to say, manufacturing our modular buildings in the city with the lowest construction cost index certainly provides our customers with a cost savings advantage.
ENR Construction Cost Index – July 2015