Construction project : short-term vs long-term

Hi Gil!

Can you provide us with a little more information about your project so that we can better understand the type of construction you are analyzing? Does the project occur over a multi-year period? Do you have detailed information from a construction budget regarding costs? 

Thanks,

Angela

 Hi Angela,

It's a multifamily residential construction project in Fresno. And total construction budget is 25935,000(soft cost+hard cost+contingeny), the length is 18 months. 

Gil, 

Do you have a further breakdown of that total construction budget? There are certain considerations that need to be made when considering Construction Impacts. Construction spending patterns will include soft costs such as architectural, engineering, and legal fees, so these should be included in the Industry Output value. Furniture, Fixtures, & Equipment (FF&E), or the large movable investments that businesses make (not directly attached to a building), should NOT be included in that construction Industry Output value. Because these purchases are often sourced from outside the study region, you can omit those purchases from the model. You may know that it was purchased through a local retailer or wholesaler, so then you can model the purchases through the appropriate Industry. Maybe you know that some or all of the purchases will be sourced locally, then you can again choose the appropriate Industry and enter the spending.   

Does this budget include the sale of the land? If so, that will also need to be deducted from the total budget. The sale of land is essentially just a transfer of assets from one party to the next, and thus generates no economic impact in and of itself. You also will need to consider the spending across years, being that the length of the project is 18 months you can either model the spending in two different dollar years (if you have the spending broken down by year/ can reasonably assume a breakdown), or just leave it all within the same dollar year if you cannot make such assumptions about when the spending will happen. If you do in fact break the spending down into two separate years, you should also adjust the employment results to make sure we are reporting "Average Annual Employment" (employment divided by the number of years the project will take to complete). Finally, remember that construction impacts are considered one time effects to the economy, and thus should be reported separately from any associated annual, or ongoing impacts.

Find more info on Construction Analyses in the following articles from our support site! 

Construction: Building the Analysis

Construction: Building Across Years

Common Construction Analysis Questions

Hope this helps!

Michael Nealy