“Construction needs to adapt quickly,” says Arcadis,
- London is once again the most expensive construction site in the world, according to the latest Arcadis report
- Many cities in North America and Europe are showing double-digit cost increases, including Chicago, New York, Munich, Berlin and Barcelona
- Melbourne and Sydney fall in the rankings as higher costs are absorbed by the supply chain
- Doing “more with less” will be key to long-term success as inflationary pressures and geopolitical uncertainty take their toll
April 7, 2022 – London has returned to the top spot as the most expensive city in the world to build, according to the latest International Construction Costs (ICC) report, published by Arcadis. According to the study of comparative construction costs in 100 world cities, London ranked first, followed by Geneva (2n/a) and Oslo (3rd). The five cheapest cities are in Asia and India.
Due to a combination of cost drivers – including rising energy costs, material shortages and labor availability – as well as strong sector demand, particularly residential and industrial, markets in North America and many European cities saw double-digit cost increases. As a result, US cities have moved up the rankings significantly. This upward trend was also helped by the US dollar, which appreciated by an average of 5% against most currencies. Cities in the UK and Germany also rose in the index.
Across Asia, the picture is mixed, with costs remaining largely stable. An exception is Singapore, where difficulties in accessing labor have triggered high levels of inflation. In Australia and the Middle East, on the other hand, demand levels have not quite met expectations, leading to a more competitive market and a higher share of costs absorbed by the supply chain. . This has resulted in places such as Melbourne and Sydney dropping up to 10 places in the rankings in 2022.
The 2022 Arcadis ICC Index covers 100 of the world’s major cities across six continents. The cost comparison has been developed to cover twenty building functions, based on a survey of construction costs, a review of market conditions and the professional judgment of its global team of experts. The calculations are based in USD and indexed to the price range for each building type compared to Amsterdam. Analysis was undertaken ahead of the conflict in Ukraine, which is expected to exacerbate material and hydrocarbon shortages, leading to significant impacts on global commodity and energy markets, and heightened global uncertainty.
In addition to providing a comparative index of global construction costs, this report also examines construction around the world and notes that different government COVID-19 strategies have resulted in varying paces of recovery. With the impact of material shortages and rising costs being felt throughout the supply chain, companies are looking to tackle pressing and persistent issues such as low productivity, employee retention and project resilience. Sustainability is also high on the agenda, with the economic pressure of resource scarcity and net zero goals increasing the importance of doing more with less. Using digital products and solutions to address resource scarcity and reduce waste is essential, while focusing on the full project lifecycle, rather than the cost of short-term returns.
A five-point “how-to guide” is featured in the report to provide a pragmatic guide to facing the challenges ahead, demonstrating how customers can streamline, standardize, automate and use digital processes to be more profitable and address sustainability. essential. goals.
Andy Beard, Global Head of Commercial and Cost Management at Arcadis, said:
“The construction has proven to be extremely robust over the last year to adapt to the most difficult circumstances. Sustained provision of housing and infrastructure, better use of data, and increased investment in technological solutions such as modern building methods can both improve efficiency and help achieve net zero.
“This adaptability will prove vital as businesses prepare for the uncertain and inflationary environment ahead. Although at first glance market conditions appear unfavorable, we believe that these challenges present more than ever a great opportunity for our industry to drive innovation forward and cement a mindset of doing more with less to reduce our own impact. on resource use and the environment. ”
10 most expensive cities
4. New York
6. San Francisco
9. Hong Kong
10 cheapest cities
97. Ho Chi Minh City
Download the full report here.
“Construction must adapt quickly,” says Arcadis, as soaring costs and growing uncertainty take their toll
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