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Inflation Rates Could Impact Jail Project
Inflation could drive up the cost of the Eau Claire County Jail expansion project if it’s delayed.
Contractors say the rate of inflation for construction projects in this part of the country is double the national average. They say that’s due to supply and demand, in addition to increased fuel costs.
Contractors consider inflation when locking in prices for a project. However, when a project is delayed, inflation can have a major impact on additional costs.
“If you take a $10 million project, and you assume that five and a half percent is correct, it costs them about $46,000 every month that they don’t start the project,” explained Don Carlson, Vice President of Operations at Market and Johnson, the construction company that will be building the new jail.
With the current rate of inflation, Market and Johnson says the jail project could cost an extra $230,000 a month if it’s delayed. However, the company expects the rate of inflation to continue to rise, which would also increase the cost of any potential delays.
