As the global market heats up, a continued focus on productivity and cost reduction is needed. With constrained capacity in many markets, the only way to deliver on aspirations is to do things differently and deliver more with available resources.
Commenting on what this means for the UK, Will Waller, Director - Head of Futures said:
“Constructions costs in London remain high and have seen continued inflation in the past year. This is a result of reasonably good demand, coupled with upward pressure on labour and materials costs, because of skills shortages and weak sterling increasing the cost of imports."
However, London’s relative construction cost position in the world remains moderately supressed compared to previous years, coming in 8th. This is because of the comparative weakness of sterling against the US dollar. The stronger dollar means that markets trading in dollars are relatively more expensive than markets trading in weaker currencies when compared on a dollar basis.
Whilst sterling’s valuation has raised the cost of materials, we have also seen a boost to foreign investment levels across the UK. However, all clients continue to pursue productivity gains with digital-solutions sitting at the heart of many of these initiatives."
Andy Beard, Global Leader Cost & Commercial Management adds:
“This is an important piece of research particularly given the trends in the global market, where certain regions including the UK are attracting significant interest and foreign investment. Crucially, when it comes to informing investment decisions and delivery, digitalization in construction presents an opportunity to help improve productivity and reduce cost. Achieving this by making processes more efficient is a typical example of the possibilities that can arise from digitalization in construction, but the biggest prize will be for those who completely reinvent how things are done.”
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