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National average construction cost data recently revealed an increase of more than 6% from 2023 to 2024 for the cost per square foot to build hospitals across the U.S., according to analysts from construction data and services firm Gordian, a provider of construction estimating, planning and procurement solutions.

This yearly square foot cost has been on the rise and has increased more than 20% over the past five years. 

While there have been signs of material cost stabilization and reduction over the past six months, it’s worth pointing out two significant contributing factors when looking at cost increases provided by Gordian’s RSMeans Data square-foot models:

  • The models are largely driven by material costs in HVAC and plumbing. HVAC prices have remained high due to supply constraints. Significant supply chain backlogs for equipment can be seen in mechanical, electrical and plumbing categories. Other factors for HVAC cost increases include inflation, labor shortages and new regulations. 
  • For material costs overall, analysts are seeing some pricing regression, but the stabilization is still amounting to an annual increase of 7% to 10% year over year, versus the nearly 19% year-over-year material cost increase witnessed from 2022 to 2023. 

This indicates that while the effects of the pandemic are starting to subside, the market is far from static. 

For health care facilities professionals, being aware of construction and facilities trends is pivotal in ensuring that health care infrastructure is not only built to last but also aligns with the evolving needs of the patients and communities being served.

Sam Giffin is director of data operations at Gordian, Greenville, S.C., a provider of Building Intelligence Solutions. He can be contacted at