Due to the great recession we have fewer skilled labor working in the construction trade industry and as a result that cost has increased significantly. On a sampling of construction projects, the cost of labor could account for 40 – 60 percent of the overall project cost.
According to Bizjournals, “the result is a shortage in the supply of skilled labor in the building trades, a trend that’s enabled everyone from mechanical contractors to steel manufacturers to punch their ticket when it comes to selecting the most attractive jobs at the most competitive rates. That in turn is turbo-charging the cost of construction and, in turn, a preference among developers to favor big, luxury projects to better recoup their costs and lock in attractive returns.”
Additional information is available on the BBJ’s website.