Restaurant Development & Design

WINTER 2014

restaurant development + design is a user-driven resource for restaurant professionals charged with building new locations and remodeling existing units.

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2 6 • R E S T A U R A N T D E V E L O P M E N T + D E S I G N • W I N T E R 2 0 1 4 BY PETER FABRIS, Contributing Editor Activity Is Up, and So Are Costs W ith the residential market leading the way, the construction industry is fnally on the rebound. Housing starts were up in 2013 and will increase 18 percent in 2014, according to the National Association of Home Builders. Even the recently lackluster commercial sector is improving, with the restaurant seg- ment among the bright lights. Englewood Construction's Commercial Construction Fore- cast 2014 predicts new restaurant construction will be robust in 2014, and not just in the fast-casual segment. "Fine-dining, white-tablecloth establishments are making a big push as the restaurant industry is performing remarkably well," says Bill Di Santo, president of the Lemont, Ill.-based frm. Stepped-up construction activity triggered a rise in construction costs of 3.6 percent in 2013, according to Rider Levett Bucknall's Construction Cost Index. This compares to a 1.5 percent increase in 2012, and about 2 percent in 2010 and 2011. The revived housing sector helped push gypsum product prices up 15.6 percent and lumber and plywood costs up 14.5 percent between October 2012 and October 2013, according to the Producer Price Index published by the U.S. Bureau of Labor Statistics. Other major construction products prices rose in the single digits or declined slightly. With continued vibrancy in the construction sector, material and labor costs will likely continue to rise, but not dramatically and not enough to dampen restaurant construction ac- tivity in 2014, industry insiders say. Rising prices do heap additional pressure on architects, contractors and development executives to trim costs wherever possible, though. Materials Steady, Labor a Concern "We've seen a pretty steady creeping up of costs over the past few years, but no major sudden peaking of costs of materials or labor," says Jacqueline Collins, director of res- taurant development with Atlanta-based Moe's Southwest Grill. "We are expecting our costs to stay roughly the same in 2014." CONSTRUCTION OUTLOOK:

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