Rising Construction Costs As A Result Of COVID-19

Background

The COVID-19 pandemic has caused significant disruptions to the construction industry as a whole. Backlogs in supply, commodity pricing, local market disruption, and an increase in demand and labour costs, have all resulted in a significant rise in construction costs and sometimes construction disruptions.  These disruptions and rising construction costs are critical variables for consideration for owners and contractors building projects under fixed price arrangements.

As  the number of construction projects increases throughout the COVID-19 pandemic, rising construction costs are not expected to dissipate any time soon. It is therefore critical for stakeholders in the construction industry entering into fixed price agreements to understand the key contractual provisions that may provide some relief against cost volatility. At the same time, there is no universally applicable solution to rising costs in construction, and case law reinforces this idea by