by Brianna Crandall — January 23, 2015—Switzerland is now the most expensive country in the world for construction, with Denmark and Hong Kong trailing close behind, while Japan and Singapore have seen significant relative cost reductions over the last year, according to the 2014 International Construction Costs Report released last week by Arcadis, a global design, consultancy, engineering, project and management services firm.
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The annual study, which benchmarks building costs in 43 countries across the globe, found that relative construction costs have been affected by currency fluctuations, commodity prices and increasing demand for development in many recovering economies throughout the year. These changes have seen the cost of building in the U.K. increase significantly, while the continuing devaluation of the yen has led to the relative cost of building in Japan to drop below that of the USA.
In contrast to last year’s index, European countries dominate the top ten. This is due, in part, to the ongoing economic recovery in the likes of Germany and France that is gradually translating into contractors demanding more for their services, according to the report. Meanwhile, currency devaluation in many emerging markets means that relative costs have dropped considerably in these areas. Costs in such countries as India, Indonesia, Malaysia, Thailand and Vietnam are now around 35 percent less than that of the U.K.
In the Gulf region, costs remain relatively modest, despite high levels of investment in transport infrastructure, such as the U.S.$200 billion Gulf Cooperation Council (GCC) rail network, and extensive event-led construction in the shape of Qatar’s successful World Cup bid. What remains to be seen is what impact the ongoing instability in the Middle East and recent weakness in oil prices will have on spending plans and, consequentially, pricing, notes Arcadis.
