In the last two (2) years I have been constantly asked why have your prices gone up so much as compared to 2019. As always it has a lot to do with Supply of quality Engineering Firms across the country and the ever-increasing demand on it by residential and commercial entities as well as building upkeep and the need to stay in line with today’s energy conservation demands. The cost of mechanical, electrical, and plumbing (MEP) services has increased significantly over the last 5 years for several reasons.
First, labor costs have risen due to a shortage of skilled MEP trade workers. With an aging workforce and fewer young people entering the trades, there is more competition for experienced technicians, engineers, and installers, pushing up wages. Increased minimum wage requirements have also contributed to higher labor costs. In an industry where talent is waning, you get what you pay for, and while sole practitioners have a lower overhead, they also don’t have a quality control factor and can be overwhelmed by multiple projects.
Second, project costs have risen sharply for many MEP components. This is due to a combination of factors including rapidly changing in that backlogs on filing have tied up many municipalities and counties. That means a project takes longer to go through its process and yet the engineer has to be ready to deal with issues all through the process. That’s office, utilities, software compliance and the ever-present human resource. There isn’t a free lunch to be found anywhere, all these increase costs also.
Third, code compliance requirements have become more complex and stringent, necessitating higher-end components and more labor to meet the code. This is particularly true for electrical and plumbing codes related to energy efficiency, water conservation, and safety. Meeting updated electrical codes often requires upgraded panels, wiring, and fixtures.
Finally, project costs like permitting fees, insurance premiums, and contractor overhead have increased at rates higher than general inflation. Local municipalities have raised permit fees to cover budget shortfalls. Insurance costs for MEP contractors have also climbed due to higher liability claims. And contractors have had to raise their overhead to cover higher operating expenses.
In summary, taken together, these factors have driven MEP installation and design costs up between 5% to 15% annually over the past five years, according to industry surveys and reports. The rate of cost increases has begun to slow in recent years but is still outpacing general inflation. Looking ahead, labor shortages, commodity price volatility, and evolving regulations mean that MEP costs are likely to continue rising, though perhaps at a more moderate pace. Project teams are advised to factor in these cost trends when developing budgets and schedules for their upcoming MEP projects. Riverside Engineering is licensed in 50 states, maintains a staff of personnel who can meet today’s professional demands. www.riv-eng.com
