How to Accurately Budget for a Commercial Construction Project in 2025

Budgeting is one of the most critical steps in any commercial construction project. The difference between a realistic, detailed budget and an overly optimistic one often determines whether a project finishes on time, on budget, and without unwanted surprises.

At DeLauter, we’ve guided developers and owners through hundreds of projects, from preconstruction to final delivery. Based on what we are seeing across the industry in 2025, here’s what you need to know to build an accurate budget that works.

1. Start with a Detailed Preconstruction Plan

Preconstruction is where the budget battle is won or lost. Owners who engage early with a general contractor and design team have the clearest picture of costs before ground is broken.

• Define scope and program requirements in detail

• Involve the builder early to flag constructability issues

• Use preconstruction services to test design decisions against budget realities

Pro tip: A strong preconstruction process reduces the number of change orders, one of the biggest drivers of cost overruns.

2. Factor in Rising Material Prices and Inflation

Material costs remain volatile in 2025. Steel, concrete, and lumber prices are fluctuating, and supply chain disruptions are still impacting delivery times.

• Get updated pricing during preconstruction, not estimates from last year

• Build escalation clauses into contracts when possible

• Consider alternative materials or value engineering when costs spike

Why it matters: A budget built on outdated numbers will almost always fail once the project begins.

3. Account for Labor Shortages and Workforce Costs

The skilled labor shortage continues to affect every region of the U.S. In 2025, this means higher wages, fewer available trades, and tighter schedules.

• Expect labor to account for a larger portion of total project cost

• Ask your builder how they manage workforce availability

• Build contingency into your budget for potential schedule shifts

4. Include Soft Costs and Hidden Expenses

Hard costs like labor and materials are only part of the equation. Owners often underestimate or overlook soft costs, which can derail a budget if not planned for.

Examples include:

• Permits, inspections, and utility connections

• Architectural and engineering fees

• Insurance, legal, and financing expenses

Pro tip: Always request a full breakdown of both hard and soft costs during preconstruction to avoid surprises.

5. Build in Contingency for the Unexpected

Every project has unknowns. Weather delays, market fluctuations, and design changes are realities of construction. An accurate budget acknowledges this.

• A typical contingency is 5–10% of total project cost

• Larger, more complex projects may require more

• A contingency fund protects schedules and owner expectations

Commercial Construction Budget Takeaway

Budgeting for a commercial construction project in 2025 requires a balance of detail, foresight, and flexibility. Owners who invest time in preconstruction planning, account for market realities, and partner with an experienced general contractor are far more likely to keep projects within budget and on schedule.

At DeLauter, our goal is to make the budgeting process as clear and predictable as possible. By combining accurate cost data with decades of industry experience, we help owners plan smarter, build with confidence, and reduce financial risk from day one.