The annual Arcadis International Construction Costs report has revealed that New York is once again the most expensive city in the world to site your construction project.
Hong Kong and Geneva have both moved up a place, but only because post-devaluation London has fallen from second to fourth place.
The full top 10 is as follows:Â Â
- New York
- Hong Kong (+1)
- Geneva (+1)
- London (-2)
- Macau
- Copenhagen
- Stockholm
- Frankfurt
- Paris
- Vienna (+1)
Arcadis reports that there has been a slowdown in the rate of growth in China and, as a consequence, the resource economies of countries such as Brazil and Saudi Arabia. Meanwhile, US cities such as New York, San Francisco and Denver are reporting high levels of activity, and are likely to see continuing competition for contractors and construction labour.
Amsterdam is also in the middle of a mini building boom which has led to high levels of inflation in local markets.
The report shows weaker growth in demand in some markets, which has "eliminated construction inflation from cities including Dubai, Singapore and Hong Kong".
Singapore has slipped from 10th to 15th in the rankings owing to over-supply and a slowing economy. It is still the third most expensive city to build in Asia, after Hong Kong and Macau.
Since last year’s index London has fallen from second to fourth, a move which "has been driven entirely by changes in exchange rates" due to the collapse of the pound after Britain’s vote to leave the European Union.
Arcadis’ cost assessment covers 13 building types that are said to be representative of the local specification used to meet market need. The firm says building solutions adopted in each location are broadly similar and as a result, the cost differential reported represents differences in specification as well as the cost of labour and materials – rather than significant differences in building function.
The report also highlights the 10 highest-value project under way in 2017 that are "being created to benefit both the communities of those in which they exist, and the wider global economy". These are:
- One belt, one road China to central Asia worth $150bn
- Delhi Mumbai Industrial Corridor Delhi to Mumbai worth $90bn
- Dubai Al Maktoum Airport Dubai UAE worth $33bn
- Grand Paris Express Paris France worth $30bn
- Hinkley Point C UK worth $22bn
- Hudson Yards US worth $20bn
- Jeddah Economic City Saudi Aradia worth $20bn
- Crossrail UK worth $20bn
- Beijing Daxing International Airport China worth $13bn
- Chengdu Tianfu International Airport China worth $11bn
The One Belt, One Road project, also known as the New Silk Road, will be partially funded by the Singapore and China Construction Bank Corporation and the Asian Infrastructure Investment Bank. It is described by Arcadis as a "strategic approach to open up new avenues to sustain its appetite for growth".
Arcadis ends the report by saying: "With an increasingly volatile and uncertain geopolitical and economic landscape, the importance of monitoring and controlling the cost lifecycle has never been more evident.
"Fluctuating currency, commodity and politics can directly affect project capital expenditure and supply chain performance underpinning investment decisions; the events of 2016 show that these fundamentals can shift quickly and unexpectedly."
Read the full report here.
Image: The New York skyline (Paulo Barcellos)
