Construction costs are up due to high inflation, and that’s affecting how the Michigan Department of Transportation approaches its projects planned for the next few years. Speaking on the MDOT podcast Talking Michigan Transportation, the agency’s Brad Wieferich, with its Bureau of Development, said MDOT operates according to five year plans that typically predict a 4% inflation rate in. With inflation higher than that, MDOT has to adjust.
“When you look at nationally what’s going on and where the consumer price index is going – we’re up 7, 8% right now – it really shouldn’t be a surprise that we’re seeing differences.”
Wiefrich says increased road construction costs are a problem nationwide, and in some places, worse than in Michigan.
“The COVID pandemic created a lot of logistical issues that are lasting. Material procurement issues, labor shortages, all kinds of materials. And now we have the war in Ukraine that’s had an effect on our fuel prices. So, there’s all kinds of things going on.”
While emphasizing this year’s MDOT projects remain on track, Wieferich explained if prices continue to rise, planners may have to make adjustments to future projects in the five-year program. He says there’s no evidence the Rebuilding Michigan bonding plan is contributing to the rising costs.
