Fresh research from consultancy firm Turner & Townsend has revealed the costliest places for construction companies to work.
According to the International Construction Market Survey 2018, New York has retained its position as the world’s most expensive city to build in, costing on average $3,900 per square metre space.
Another US city, San Francisco, held second spot on the list with construction costs of $3,736 per square metre.
Hong Kong ($3,703 per square metre) leapfrogged Zurich ($3,652) into third, while London ($3,617) held fifth place, registering noticeably higher costs than other regions in the UK, driven by high demand and a shortage of construction skills.
In the foreword to Turner & Townsend’s report, Steve McGuckin, Global Head of Client Programmes, outlined the major observations on the industry writ large: “There is an expectation of increasing construction activity around the globe with a few exceptions, notably a reduction in the UK.
“This year’s survey shows skills shortages are prevalent across disparate markets. Just three of the 46 markets surveyed recorded a surplus. Skills shortages appeared in markets as different as Zurich, where labour costs $104 an hour and Bangalore, with $1.1 hourly.”
In terms of cost to build, New York construction costs were calculated as six times higher than in Bangalore (India), which was the cheapest place of the 46 studied with costs of $638 per square metre.
Turner & Townsend assessed six different building types when calculating the cost of an average project: Highrise apartments, prestige office blocks, large warehouse distribution centres, general hospitals, primary and secondary schools and shopping centres.
Global construction costs are expected to rise 4.3% in 2018 following a 4.1% rise in 2017. Buenos Aires is a notable outlier in this calculation, with costs predicted to rise by a staggering 35% over the next year.