You are probably missing out on some projects of your desired scale if you are using the same dollar search range that you set several years ago.

Construction project costs can change as much as 10 percent or more over as short a period as six months, which is long enough for the economic, construction or materials price cycles to shift to a distinctly different demand/supply balance. Price cycles typically last four years. Beginning at the bottom of a cycle, market conditions, and hence pricing, improve for three years and then worsen for a year, returning to the cycle’s low point.

Construction project pricing over a four year cycle changes with the demand/supply of resources used in a project and fluctuations in the macroeconomic cycle that set the level of resource demand. Cycle timing is different in each small market. Although each market goes through the same four year cycle, the cycle begins and ends at a different point in time in each market. The relevant cycle for each contractor is the weighted sum of the cycles for each resource he uses in his project work.

The resources are the labor, materials and equipment specialized for each type of project, plus resources used generally in all types of construction and elsewhere in the economy. The difference in cycle timing for different resources used in a project usually means that some of the cycles are offsetting. For example, at a given point in time, lumber demand and prices may be at a cyclical peak while design, labor or metals may be near the bottom of their cycle, showing weak pricing.

Project pricing can change very quickly when most of the cycles for the resources used in a project and the general economic cycle that sets the demand level are near the cyclical peak (bottom). Note that this happened in the nonresidential building market from late 2007 to early 2008.

Source: Reed Construction Data