Soaring costs, rising uncertainty require construction’s rapid adaptation, reports Arcadis

New York, San Francisco among 10 most expensive construction markets globally

• Many North American and European cities show double-digit cost increases, including Chicago, New York, Munich, Berlin and Barcelona
• Doing ‘more with less’ will be critical to long-term success, as inflation and geo-political uncertainty take their toll
• Early planning and cost guarantees will help mitigate the impact of supply chain challenges

Highlands Ranch, Colo., April 7, 2022 – London has returned to first place as the most expensive city to build in, according to Arcadis’ latest International Construction Costs (ICC) report. The study, which compares construction costs across 100 cities globally, ranked New York and San Francisco as the fourth and sixth most expensive construction markets, respectively.

Rising energy costs, materials shortages and limited labor availability, combined with high demand in the residential and industrial markets, spurred double-digit cost increases in many North American and European markets. As a result, U.S. cities moved up significantly in the ranking. This upward trend was also encouraged by the U.S. dollar’s 5% appreciation against most currencies. UK and German cities also moved up in the index.

“Supply chain delays and material availability are creating major challenges for many construction clients,” said David Hudd, Arcadis’ cost and commercial management lead in North America. “It is critical that organizations act early to procure the necessary materials, evaluate their processes to optimize agility and flexibility and look for creative risk-sharing techniques that limit the impact of future inflation.”

Materials shortages and rising costs have created significant global supply chain challenges. As such, businesses are focused on tackling low productivity, staff retention and project resilience. The economic pressure of resource scarcity has also highlighted the importance of sustainability and doing more with less. Additionally, digital products that help reduce waste are growing increasingly valuable as is a focus on the full project lifecycle, rather than the cost of short-term returns. 

The full report can be found here.