A Brighter Outlook: International Construction Cost Survey 2013

A brighter
outlook
International construction
cost survey 2013
Foreword After an unprecedented period of global economic
Overview 1
instability, things are beginning to slowly improve.
Many markets remain fragile but it’s clear that sentiment
Australia 12
Brazil 14 is improving. With recovery comes opportunity, and some
Canada 16 key markets around the world are showing sustainable
China 18
Germany 20
signs of growth.
Hong Kong 22
India 24 Given this context, our international construction cost
Ireland 26 survey 2013 makes for interesting reading. Data gathered
Japan 28
Malaysia 30
by our people around the world reflects major projects
Netherlands 32 and programmes in every sector. Our team of construction
Oman 34
economists provides expert analysis and ensure the data
Poland 36
Qatar 38 is as robust as possible, given the ever-shifting nature of
Russia 40 such information.
Singapore 42
South Africa 44
This report contains data from 23 countries, with Brazil,
South Korea 46
UAE 48 Poland and Uganda appearing for the first time. Clients
Uganda 50 planning major programmes of work will find this a useful
UK 52
US 54 decision-making tool that helps them compare future
Vietnam 56 construction costs between countries and regions.
Purchasing power parity 58
To allow true country-to-country comparisons to be made,
we have introduced purchasing power parity methodology
this year to calculate construction costs. Developed by
Turner & Townsend with Bond University in Australia,
our construction purchasing power parity index takes
out the impact of exchange rate volatility. This is a new
approach for construction, and one we believe will become
significant (more about this on page 58).
Contact us if you require any more information about this
survey or if you need data and advice that can help inform
decision-making for your project or programme.
Vincent Clancy
Chief Executive Officer
With recovery
comes opportunity
The economic tide has turned and there is reason to be
optimistic. Construction markets around the world are
showing the first signs of recovery and shelved projects are
being dusted off. The results of our 2013 survey of international
construction costs reveal where the potential opportunities
might be for early movers.
The global outlook for construction is Figure 1. More projects in the next 12 months
the most positive we have seen since for over half the markets surveyed
the financial crisis began in 2008. Of
the 23 markets included in this survey,
13 expect to see more projects
starting in the year ahead than they
did in the previous
12 months.
Asia, parts of Europe, the Middle East

and the US are all warming up (see
Figure 1). Investment in housing and
infrastructure is building momentum
for stagnant economies and projects
which had been on hold since the
financial crisis began. These are
now going out for tender.
The start of a global recovery is

a great time to build. First-mover
advantages include stabilised
construction costs, reduced schedule Cooler Staying the same Warmer
risk and the delivery of projects as
Fewer projects Similar number of More projects starting
demand is increasing. In many regions
than last 12 months projects to the last than last 12 months
tender prices are becoming more
12 months
competitive and there are plenty
of firms keen to bid. China Australia Brazil Russia
India Hong Kong Canada Singapore
Of course, some developers will prefer Netherlands Ireland Germany UAE
to watch and wait before making Poland Vietnam Japan Uganda
their move. In the first fragile stages
South Africa Malaysia UK
of recovery, world events can erode
South Korea Oman US
market confidence overnight, and
there are likely to be headwinds Qatar
still to come.
We asked our people around the world whether they expected more, fewer or the
same number of projects to start in the next 12 months compared to the previous
Stable costs are the trend, but 12 months. Of the 23 markets surveyed, 13 expect more projects to start, with four
there are exceptions. In emerging predicting no change and six expecting fewer projects.
economies – including China, India,

Malaysia, Russia and South Africa,
– construction costs are expected to
rise steadily. And in certain hotspots
– Brazil and Qatar, both future World
Cup hosts – costs are also forecast
to increase strongly.
International construction cost survey 2013 1

“A business park in Japan
would cost 24 percent
more to build than one
in the UK.”
We can see some of these trends For example, we can see that an office
emerging through our cost index
benchmarking of high-rise apartments
building in a business park in Japan
would cost 24 percent more to build
Purchasing
and offices in central business districts than one in the UK; 3,339 purchasing power parity
(see Figures 2 and 3). So, for example,
while costs for offices in the UK have
power parity units per m2 for Japan
compared to 2,690 units for the UK.
methodology allows
risen just four percent between 2010 Purchasing power parity indicates the a true comparison
and 2013, comparable costs in India cost relative to the cost of living, so
have risen 25 percent. we can see that concrete in China at between countries
129 is almost half that of India at 283.
Over the following pages, we present
the findings of our 2013 international Turner & Townsend worked with Bond
+25%
construction cost survey. The data University’s Institute of Sustainable
comes from current construction Development in Queensland, Australia
programmes, and reflects prices at to create this construction-specific
the middle of 2013. All costs exclude index, which we will be employing and
VAT and applicable sales taxes. developing over the coming years.
You can read more about purchasing
the cost increase
Purchasing power parity: power parity on page 58. of building offices
a new way to compare markets in India
For those who want to drill down
further into our data, we have
included output costs (cost per
square metre) and input costs (labour,
materials and plant) for each type
of building and geographical market
on pages 13 to 57. The costs are
shown in the local currency, in US
dollars and as a purchasing power
parity value.
The methodology allows a true

comparison between countries,
removing the impact of varying
currency exchange rates. The higher
the purchasing power parity adjusted
cost, the higher the relative costs
of building in one country over
another. Though purchasing power
parity indexes are used in some
branches of economics, this method
has rarely been used to compare
construction costs.
2 Turner & Townsend

Figure 2. Changes to the cost of central business Figure 3. Changes to the cost of high-rise
district offices since 2010 apartments since 2010
Mid-year 2010 2011 2012 2013 Mid-year 2010 2011 2012 2013
Australia 100 102 103 105 Australia 100 102 101 101
Brazil 100 104 109 114 Brazil 100 104 108 112
Canada 100 102 104 106 Canada 100 102 103 104
China 100 107 113 120 China 100 107 112 118
Germany 100 102 104 106 Germany 100 102 104 106
Hong Kong 100 104 109 115 Hong Kong 100 104 109 115
India 100 108 117 125 India 100 108 117 125
Ireland 100 102 102 104 Ireland 100 101 100 101
Japan 100 100 100 101 Japan 100 100 100 101
Malaysia 100 104 109 113 Malaysia 100 105 109 113
Netherlands 100 102 104 106 Netherlands 100 102 103 105
Oman 100 101 103 105 Oman 100 101 103 105
Poland 100 102 104 106 Poland 100 101 103 105
Qatar 100 102 106 111 Qatar 100 100 103 108
Russia 100 104 110 116 Russia 100 104 109 115
Singapore 100 104 108 112 Singapore 100 103 105 109
South Africa 100 106 114 124 South Africa 100 105 112 120
South Korea 100 102 104 106 South Korea 100 102 104 106
UAE 100 100 102 105 UAE 100 100 102 104
Uganda 100 105 110 116 Uganda 100 104 108 114
UK 100 102 102 104 UK 100 102 101 103
US 100 100 103 107 US 100 100 102 106
Vietnam 100 110 119 128 Vietnam 100 108 116 124
Looking at cost changes for prime property in the residential We can see that for most countries, there has been a gradual
and commercial sectors helps us to identify trends and make rise in costs for both types of building. There are exceptions:
predictions for the future. The two charts show construction costs have remained more-or-less stable in Australia, Ireland,
costs indexed to 2010 = 100 for high-rise apartments and Japan and the UK; whereas in China, India, South Africa and
central business district offices, for each region of the Vietnam, costs have risen more steeply.
survey based on cost per square metre.

+12% $1.3tn
US house price of Middle East
growth over the construction projects
last 12 months are in the planning
or tendering stages
US recovery still fragile The US’s newest industry and source The Middle East is also increasing
In the past 12 months, the US of energy, shale gas, is also injecting its construction activity, reawakening
economy has begun to pick up, further growth into the economy. many of the ambitious projects
with the impact felt around the Projects to construct the pipelines and that have been dormant or partially
world. Quantitative easing and associated infrastructure are ramping completed since the global financial
low interest rates adopted by the up, with the prospect of US energy crisis. Some USD1.3tn worth of
US’s central bank, the Fed, have self-sufficiency promising a big boost construction projects are in the
contributed to this fledgling recovery. to the economy. planning or tendering stages across
However, there is uncertainty the region.
surrounding the Fed’s ability to taper Falling unemployment and recovering
this policy, which could lead to further house prices will encourage US Projects such as high-speed rail,
problems when it is reduced and, consumers to spend more, providing manufacturing plants, heavy
ultimately, stopped. a much-needed boost to international industrial plants, football stadiums,
trade and construction. Still, the US and housing and cultural precincts
Suggestions from the Fed in May recovery remains fragile, operating are moving to construction or already
this year that it might cut back on within the confines of a quantitative underway. Traditionally, strong
its bond-buying programme over easing headwind and continued markets such as Dubai are gradually
the coming months had an immediate government impasses. coming back to full strength and
and negative effect on global stock new construction leaders such
markets. Investors ditched risky Policy changes in Europe? as Qatar are emerging, with big
assets in favour of certainty. In contrast to the tactics of the project portfolios.
Confidence returned after US’s central bank, European
further assurances from the Fed, countries have chosen the path There are other engines of global
but continued pressures remain. of austerity. However, recent policy growth. Japan is making substantial
announcements indicate a change efforts to stimulate its economy after
Standard & Poor’s (S&P) 500, which of approach. Expect investment in decades of stagnation by pumping
tracks publicly traded US companies, infrastructure, which should help in money, causing the yen to fall
has recently reached all-time highs relieve the chronic underemployment dramatically. The world’s third biggest
and global funds are moving back holding several major European economy is becoming competitive
into US dollars as the currency countries back. again, construction is picking up and
starts to stabilise. Other markets have trade skills shortages are becoming
followed the US, only pausing in May Though some European countries, a problem.
2013 as the northern economies took such as Greece, Portugal and
summer holidays. Spain, continue to suffer from
underemployment, many parts
Unemployment in the US is edging of Europe are showing signs
downwards, and housing construction of recovery. Here, forecasts
is increasing again. The Case-Shiller of GDP growth over the next
20-City-Index, which measures the year are improving prospects
value of residential real estate in for construction.
20 metropolitan areas of the US,
shows a house price growth of 12
percent over the past 12 months.
4 Turner & Townsend

Unemployment
in the US is edging
downwards, and
housing construction
is increasing again

All change in China Indications show that China has
For the past five years, China’s growth now entered a new lower-growth
has kept the global economy growing trajectory, although with growth
at above three percent, through its forecast at seven to eight percent,
demand for commodities. Its appetite it will continue to be an important
for iron ore, copper, coal and oil during driver of global growth.
that period drove up commodity
prices and spurred a wave of mining Changes in China are felt elsewhere
investment. China’s manufacture in the world. Lower commodity prices
and export of cheap goods has also have caused the sudden cancellation
kept global inflation down to below of numerous natural resource projects
two percent. worldwide, leading to concern in the
economies of Australia and Latin
This changed in late 2012, following America, where mining plays
concerns about the sustainability a major role.
of Chinese growth as their new
political leadership established itself.
6 Turner & Townsend

“China has now entered
a new lower-growth
trajectory, although with
growth forecast at seven
to eight percent, it will
continue to be an important
driver of global growth.”

Competitive tenders It is interesting to note that
Though construction markets countries in parts of Africa, Asia,
around the world are warming up, the Middle East and Russia have
tender prices will not be following indicated higher contractors’
suit immediately. In two-thirds margins. A more vibrant construction
of the markets surveyed, there market allows margins to increase
is strong competition on tenders, through reduced tender competition.
with others reporting moderate Barriers to entry in some markets
competition. may also limit the number of tenders
and help keep margins higher (see
In general, construction costs are Figure 5).
only increasing slowly, often in line
with a country’s general inflation. Preliminaries
In many regions, costs have barely Ranging from eight percent to
moved for five years. Flat prices go 15 percent, the spread in the
all along the value chain: engineers’, range of preliminaries – costs such
architects’ and construction as supervision, project set-up,
consultants’ costs are competitive, scaffolding, and temporary facilities
and skilled labour is fairly easy – indicates different requirements
to obtain in most markets. between countries. Higher-cost
countries may have higher
Margins inclusions, due to elements such
Contractors’ margins in developed as specifications for scaffolding
economies have been hard hit by (based on local safety standards)
the global financial crisis. Fierce and insurance costs (see Figure 6).
tender competition has forced
many contractors to tender with Countries or regions where space
very low margins, hoping to pick restrictions are common, with
up additional margin during the awkward building sites, would
construction by completing ahead typically have higher preliminaries.
of schedule, through better For example, the preliminaries for
efficiency, or negotiating a building in New York City might
advantageous deals with be expected to be higher than
their suppliers. for the rest of the US.
Figure 4. Strong competition is keeping tenders competitive in the majority of markets
Intense competition, not

much work, prices low:
Ireland
Netherlands
South Korea
Strong competition,
moderate tender prices:
Australia
Canada
China
Germany
Malaysia
Oman
Singapore
South Africa
UAE
Uganda
UK
US
Vietnam
Moderate competition,
moderate tender prices:
Brazil
Hong Kong
India
Japan
Poland
Russia
Qatar
We asked our experts how they would describe tender conditions in their local
markets. 16 of the 23 described competition on bids as strong
or intense, limiting the prices of bids.
8 Turner & Townsend

Figure 5. Wide range of contractors’ margins tells story of the markets
Canada
Ireland
South Korea
Australia
USA
UK
Vietnam
Netherlands
Germany
Hong Kong
Poland
China
Japan
Singapore
UAE
Oman
Malaysia
Brazil
Russia
South Africa
Uganda
Qatar
India
0 2 4 6 8 10 12 14 16 18 20
Percentage
This chart shows what percentage of a building’s cost a At the lower end of the range, contractors in Canada, Ireland,
contractor would typically make as profit on an office building South Korea, Australia, US and UK all currently make less than
with a gross floor area of 5,000m2. Generally, where work five percent margin. Whereas in South Africa, Uganda, Qatar
volumes are lower, margins are squeezed as contractors and India, margins are relatively high: above ten percent.
lower their tender prices in order to win work.
Figure 6. Difference in preliminaries, depending on project’s location
20
19
18
17
16
15
14
13
12
Percentage
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This chart shows what proportion of a building’s cost goes on Typically, higher-cost countries have higher preliminaries.
preliminaries for an office with a gross floor area of 5,000m2. Regulatory compliance, such as safety and environmental
Preliminaries include costs such as scaffolding, approvals, requirements, adds further preliminary costs.
insurances, power and water, cleaning and handover,
and work supervision.

A stable outlook for costs Construction wages and salaries
Materials prices are competitive, in advanced economies have changed
and are expected to increase only little since the financial crisis and are
slowly for several years. In 2011–12, expected to remain relatively stable.
high prices for commodities fed into In contrast, those in China, India,
cost hikes for construction products South Africa and Vietnam will continue
such as steel, copper cables and to increase strongly, but from a low
copper pipes. In late 2012, however, base (Figure 7 shows relative labour
those commodity prices started to costs between markets).
fall. Rises in manufacturing wages and
energy will cause only a gradual price Looking ahead, we forecast modest
rise over the next few years. rises in construction costs over the
coming 12 months in many markets.
The cost of manufacturing plants Australia, Ireland, the Netherlands,
and equipment is also relatively Poland, Oman and the UAE should
stable. European manufacturers who all experience just two percent cost
were hit hard after the global financial escalation between mid-2013 and mid-
crisis are likely to have spare plant 2014, removing that element of risk
and labour capacity for several years. from projects. At the other end of the
scale, Brazil, Hong Kong, India, Qatar
and South Africa could all experience
cost escalation of six percent or more,
with South Africa predicting the
highest escalation, at ten percent
(see Figure 8).
+2%
cost escalation
over the coming
12 months in
many markets
10 Turner & Townsend

Figure 7. The cost of labour
Brazil
China Poland Qatar
Australia
Germany
Japan
Singapore
Ireland
India
South
Africa
Oman
UAE
UK
US
Hong Uganda
Kong Netherlands
Malaysia
Vietnam
Canada South
Korea
Russia
From this chart, we can see how hourly labour costs compare
in different markets around the world. As might be expected,
construction operatives in the US where parts of the country
are still heavily unionised, enjoy the highest hourly rates in the
world, with size relating to cost (small circles = lower cost).
Figure 8. How much will costs rise over the next 12 months?
South Africa
India
Brazil
Hong Kong
Japan
China
Vietnam
Russia
Uganda
Qatar
Germany
UK
Canada
Singapore
Malaysia
South Korea
Ireland
Netherlands
US
Australia
UAE
Oman
Poland
0 1 2 3 4 5 6 7 8 9 10
Percentage
We asked our experts to predict how much construction costs Developers in Ireland, Netherlands, US, Australia, UAE, Oman
would rise between mid-2013 and mid-2014. As can be seen from and Poland will be taking on little risk of cost escalation, with
the chart, we expect a great variation in cost escalation, with only two percent predicted. Whereas in countries such as South
costs in some markets remaining almost flat, while others are Africa, India, Brazil and Hong Kong, rising construction costs
rising quickly. must be an important consideration.

Australia
Residential recovery and falling exchange rate to drive growth
The Australian economy continued to grow during Meanwhile, domestic non-resources construction has
the period following the global financial crisis, through been hit by low demand, weak confidence and
a massive investment in mining and energy projects. a shortage of projects. This has kept margins low and
Now that this investment is tailing off, where will the tendering very competitive.
next growth driver come from?
Housing recovery is set to be the next growth sector.

Low interest rates and improving values are starting
to have the desired effect. Fortunately, the high Australian
dollar, which plagued the export sector, is now devaluing,
offering better opportunities for tourism, attracting
overseas students and services exports.
International building costs AUD USD Purchasing

per m2 of internal area, in 2013 (exchange rate: power parity
1.10)
Airports
Domestic terminal – full service 4,900 4,455 4,900
Low-cost carrier – basic service 3,880 3,527 3,880
Carparks
Multistorey – above ground 820 745 820
Multistorey – below ground 1,220 1,109 1,220
Commercial
Offices – business park 1,860 1,691 1,860
CBD offices – up to 20 floors medium (A-grade) 2,940 2,673 2,940
CBD offices – high-rise prestige 3,260 2,964 3,260
Education
Primary and secondary schools 1,940 1,764 1,940
University 3,140 2,855 3,140
Hospitals
Day centre (including basic surgeries) 2,960 2,691 2,960
Regional hospital 3,400 3,091 3,400
General hospital (eg city teaching hospital) 5,340 4,855 5,340
Hotels
3 star travellers 2,350 2,136 2,350
5 star luxury 3,900 3,545 3,900
Resort style 3,600 3,273 3,600
Industrial
Warehouse/factory units – basic 770 700 770
Large warehouse distribution centre 950 864 950
High-tech factory/laboratory 1,560 1,418 1,560
Residential
Individual detached house – medium standard 1,650 1,500 1,650
Individual detached house – prestige 2,160 1,964 2,160
Townhouses – medium standard 1,700 1,545 1,700
Apartments – private medium density 1,960 1,782 1,960
Apartments – high rise 2,440 2,218 2,440
Aged care/affordable units 2,350 2,136 2,350
Retail
Large shopping centre including mall 2,240 2,036 2,240
Neighbourhood incl supermarket 1,900 1,727 1,900
Prestige car showroom 2,500 2,273 2,500

Australia – international building costs AUD USD Purchasing
per m2 of internal area (exchange rate: power parity
1.10)
Composite
Excavate basement (m3) (1,800m3 job) 22 20 22
Excavate footings (m) 36 33 36
Concrete in slab (m3) (1,500m3 job) 261 237 261
Reinforcement in beams (tonne) 2,076 1,887 2,076
Formwork to soffit of slab (m2) 122 111 122
Blockwork in wall (m2) (10,000 block job) 134 121 134
Structural steel beams (tonne) 2,400 2,182 2,400
Pre-cast concrete wall (m2) 200 182 200
Curtain wall glazing incl support system (m2) (1,000m2 job) 620 564 620
Plasterboard 13mm thick to stud wall (m2) (3,000m2 job) 35 32 35
Single solid core door incl frame and hardware (50 door job) 773 702 773
Painting to walls primer + 2 coats (m2) 14 13 14
Ceramic tiling (m2) (1,000m2 job) 110 100 110
Vinyl flooring to wet areas (m2) (500m2 job) 52 47 52
Carpet medium tufted (m2) (4,500m2 job) 60 55 60
Lighting installation (m2) (5,000m2+ job) 82 74 82
Copper pipe 15mm to wall (m) (1,000m+ job) 61 55 61
Fire sprinklers (per m2) (5,000m2 job) 46 42 46
Air conditioning incl main plant (m2) (5,000m2+ job) 250 227 250
Labour
Group 1 tradesman eg plumber/electrician 66 60 66
Group 2 tradesman eg carpenter/bricklayer 59 54 59
Group 3 tradesman eg carpet layer, tiler, plasterer 52 47 52
General labourer 38 35 38
Site foreman 75 68 75
Material
Concrete 30 MPa (m3) (1,500m3 job) 225 205 225
Reinforcement bar 16mm (tonne) (120 tonne job) 1,125 1,023 1,125
Concrete block (400x200) per 1,000 (>10,000 block job) 3,394 3,085 3,394
Standard brick per 1,000 568 516 568
Structural steel beams (tonne) (100 tonne + job) 1,550 1,409 1,550
Glass pane 10mm tempered (m2) 240 218 240
Softwood timber for framing 100mm x 50mm (m) 4 3 4
13 mm plasterboard (m2) 8 7 8
Emulsion paint (litre) 12 11 12
Copper pipe 15 mm (m) (1,000m+ job) 12 11 12
Copper cable (m) (3C + E, 2.5mm PVC) (100,000m+ job) 4 4 4
Plant
Hire 50t mobile crane + operator (day) 2,100 1,909 2,100
Market: staying the same Adelaide 95

Tendering: lukewarm Brisbane 98
Cost escalation: 2% Melbourne 98
Contractors’ margin: 4% Perth 96
Preliminaries: 12% Sydney 100

Brazil
Public spending will maintain growth well beyond the World Cup and Olympics
Brazil’s continued growth and ambitious construction While non-residential construction spending growth
plans for the 2014 World Cup and 2016 Olympics will is likely to slow down after the build-up to the World Cup
add pressure to construction costs, especially in the and Olympics, spending on residential construction and
venue cities. Skills and equipment shortages are likely countrywide infrastructure is expected to accelerate
in these areas. However, Brazil is a large country with beyond 2016 to 2022.
a large population, and the additional construction
demand should be within its capabilities.
Over the next five years, construction spending in the

country is expected to increase at a seven percent
compound annual growth rate. This growth is due
to mammoth public housing and infrastructure projects
across the country, in addition to the major works being
undertaken in preparation for the World Cup and the
Rio Olympics.
International building costs Real USD Purchasing

2.28)
Airports
Carparks
Multistorey – above ground 1,650 724 937
Multistorey – below ground 2,150 943 1,222
Commercial
Education
Primary and secondary schools 1,980 868 1,125
University 2,640 1,158 1,500
Hospitals
Hotels
5 star luxury 3,470 1,522 1,972
Resort style 3,140 1,377 1,784
Industrial
Warehouse/factory units – basic 1,520 667 864
Large warehouse distribution centre 1,960 860 1,114
Residential
Individual detached house – medium standard 1,500 658 852
Individual detached house – prestige 2,000 877 1,136
Townhouses – medium standard 2,200 965 1,250
Retail

Brazil – international building costs Real USD Purchasing
2.28)
Composite
Curtain wall glazing incl support system (m2) (1,000m2 job) 2,500 1,096 1,420
Single solid core door incl frame and hardware (50 door job) 4,200 1,842 2,386
Labour
Material
Concrete block (400x200) per 1,000 (>10,000 block job) 1,500 658 852
Plant
Market: getting warmer Belo Horizonte 87

Tendering: warm Brasilia 94
Cost escalation: 7% Pôrto Alegre 81
Contractors’ margin: 9% Rio de Janeiro 101
Preliminaries: 11% São Paolo 100

Canada
All sectors picking up, with tenders still competitive
The Canadian economy has been one of the strongest The overvalued Canadian dollar has eased down
global performers among advanced economies in five percent against the US dollar in 2013. This will
recent years. Unemployment is down to 7.2 percent and shore up Canada’s competitive position and
a strong resources sector is helping to boost exports and export earnings.
engineering construction. However, growth of 1.7 percent
in the second quarter of 2013 disappointed policymakers, Construction cost increases will be moderate,
who were hoping for 2.5 percent. with tendering competitive and only small wage
increases. The relatively weak domestic private
Construction in most sectors tailed off in late 2012. But by sector should improve over 2013 and 2014.
mid-2013 all sectors, including housing, commercial and
industrial, were picking up again, along with construction
employment, which is now showing moderate growth.
International building costs CAD USD Purchasing

1.03)
Airports
Carparks
Commercial
Education
University 3,530 3,427 3,254
Hospitals
Hotels
5 star luxury 2,820 2,738 2,600
Resort style 2,820 2,738 2,600
Industrial
Large warehouse distribution centre 1,010 981 931
Residential
Retail

Canada – international building costs CAD USD Purchasing
1.03)
Composite
Labour
Material
Plant
Market: getting warmer Calgary 113

Tendering: lukewarm Edmonton 111
Cost escalation: 3% Halifax 95
Contractors’ margin: 2% Montreal 95
Preliminaries: 8% Ottawa 103
Toronto 100
Vancouver 95

China
Construction market cools as growth rate slows
Chinese growth has now settled at a more moderate Construction in the commercial and retail sectors
level of seven to eight percent, following several years is buoyant, but industrial spending appears to be
of very strong growth. The Chinese economy is still slowing, especially in the more developed southern
investment led, despite efforts to stimulate domestic and eastern cities.
consumption and grow the Chinese middle class.
Though the Chinese market is cooler, tender prices
Once again, housing and apartment construction are still expected to increase, albeit at a lower rate than
is in danger of overheating, although various government in previous years. Labour costs, while still a relatively
efforts to slow this sector may prove successful for low portion of total construction costs, are still growing
a while. Efforts are being made to encourage more and are likely to have more of an impact on tender prices
foreign investment, such as healthcare provision. in the future.
International building costs CNY USD Purchasing

6.13)
Airports
Carparks
Commercial
Offices – business park 4,690 765 1,412
Education
University 5,390 879 1,623
Hospitals
Day centre (including basic surgeries) 4,410 719 1,328
Regional hospital 5,350 873 1,611
General hospital (eg city teaching hospital) 5,980 976 1,800
Hotels
3 star travellers 5,780 943 1,740
5 star luxury 15,000 2,447 4,516
Resort style 8,750 1,427 2,634
Industrial
High-tech factory/laboratory 5,870 958 1,767
Residential
Individual detached house – medium standard 4,540 741 1,367
Apartments – private medium density 3,330 543 1,003
Apartments – high rise 4,600 750 1,385
Aged care/affordable units 2,710 442 816
Retail
Neighbourhood incl supermarket 4,220 688 1,271
Prestige car showroom 3,650 595 1,099

China – international building costs CNY USD Purchasing
6.13)
Composite
Reinforcement in beams (tonne) 5,200 848 1,566
Curtain wall glazing incl support system (m2) (1,000m2 job) 1,600 261 482
Single solid core door incl frame and hardware (50 door job) 2,670 436 804
Labour
Site foreman 31 5 9
Material
Reinforcement bar 16mm (tonne) (120 tonne job) 4,500 734 1,355
Concrete block (400x200) per 1,000 (>10,000 block job) 32 5 10
Plant
Hire 50t mobile crane + operator (day) 2,100 343 632
Market: getting cooler Beijing 97

Tendering: lukewarm Chongqing 100
Cost escalation: 5% Guangzhou 92
Contractors’ margin: 6% Shanghai 100
Preliminaries: 8% Shenzen 105

Germany
Solid growth which looks set to continue
Germany achieved a region-leading growth rate of Some of the major infrastructure projects which added
0.9 percent in the second quarter of 2013 compared to this growth rate, such as the Berlin airport and the
to the same period in 2012. Business confidence is now Frankfurt airport expansion, are, however, coming to
at its highest level in 16 months, indicating the improving an end. The outlook for commercial and infrastructure
prospects of the region. construction for the immediate future is slightly weaker.
Housebuilding is benefiting from low interest rates, As a consequence, construction cost escalation is mild.
improving demand and a growing preference to hold But as the economies of Germany’s European neighbours
physical assets rather than shares. German industry improve over 2014–16, German construction activity
is doing well, with orders continuing to increase. This also is set to increase further.
holds for the building, civil engineering and underground
construction sectors which have grown by nearly ten
percent over the last year.
International building costs EUR USD Purchasing

0.76)
Airports
Carparks
Multistorey – below ground 760 1,000 1,137
Commercial
Education
University 1,930 2,539 2,887
Hospitals
Hotels
5 star luxury 3,250 4,276 4,861
Resort style 2,110 2,776 3,156
Industrial
Large warehouse distribution centre 750 987 1,122
Residential
Apartments – private medium density 950 1,250 1,421
Retail

Germany – international building costs EUR USD Purchasing
0.76)
Composite

Single solid core door incl frame and hardware (50 door job) 865 1,138 1,294
Labour
Material
Reinforcement bar 16mm (tonne) (120 tonne job) 823 1,083 1,231
Standard brick per 1,000 673 885 1,006
Plant
Market: getting warmer Berlin 90

Tendering: lukewarm Frankfurt 95
Cost escalation: 3% Munich 100
Contractors’ margin: 5% Stuttgart 96
Preliminaries: 15%
There was an average German escalation of two percent during 2102–13. Some costs/rates are significantly higher than previous
editions following an exercise to align specifications and inclusions with regional peers.

Hong Kong
Booming civil sector will push prices up in 2014
Hong Kong’s construction industry is experiencing Construction materials’ costs are rising relatively slowly,
strong growth, with several sectors booming again. with the exception of key civil materials, such as concrete
and rebar. Labour costs, however, suffer from high cost
The civil construction sector is by far the largest growth escalation due to increasing labour shortages and
driver, with five large rail projects underway or scheduled an ageing workforce.
to commence soon. Besides these high-profile rail projects,
an Environmental Impact Statement for an USD11.1bn In the short term, construction cost escalation will
third runway at the city’s airport is now underway. remain comparatively moderate. However, from the
second quarter of 2014 costs are forecast to increase
Due to these projects and incessant demand for strongly again.
commercial and residential real estate in the densely
populated city, construction volumes are at a high level.
International building costs HKD USD Purchasing

7.75)
Airports
Carparks
Multistorey – above ground 10,000 1,290 1,754
Commercial
Education
University 24,000 3,097 4,211
Hospitals
Hotels
3 star travellers 26,000 3,355 4,561
5 star luxury 32,000 4,129 5,614
Resort style 35,000 4,516 6,140
Industrial
Warehouse/factory units – basic 13,500 1,742 2,368
Large warehouse distribution centre 15,000 1,935 2,632
Residential
Retail

Hong Kong – international building costs HKD USD Purchasing
7.75)
Composite
Concrete in slab (m3) (1,500m3 job) 1,260 163 221
Pre-cast concrete wall (m2) 1,200 155 211
Single solid core door incl frame and hardware (50 door job) 6,000 774 1,053
Air conditioning incl main plant (m2) (5,000m2+ job) 2,600 335 456
Labour
Material
Standard brick per 1,000 1,950 252 342
Glass pane 10mm tempered (m2) 1,880 243 330
Plant
Hire 50t mobile crane + operator (day) 6,000 774 1,053
Market: staying the same

Tendering: warm
Cost escalation: 6%
Contractors’ margin: 6%
Preliminaries: 15%

India
Slow now, but long-term prospects look good
At five percent year-on-year, growth in the Indian Recently announced government programmes include
economy in 2012–13 has been the slowest the country easing of foreign direct investment rules in the multi-brand
has seen in the past decade. retail and aviation sectors and increased investment plans
for metro rail projects in 19 cities, motorways and roads.
Rising interest costs and fewer government and private
projects have affected the construction sector. Contractors Inflation and construction cost escalation remain quite
also complain about excessive bureaucracy causing slower high. The weakened exchange rate will add to costs
project approvals and increased financial risks. of imported equipment, machinery, fuel and materials.
Despite the short-term weakness, the outlook for the

sector remains positive in the longer term. The upside
of the weakening exchange rate will be improved export
earnings, providing much-needed capital for investment.
International building costs INR USD Purchasing

58.00)
Airports
Low-cost carrier – basic service 49,600 855 2,543
Carparks
Multistorey – above ground 27,360 472 1,403
Commercial
CBD offices – up to 20 floors medium (A-grade) 39,900 688 2,046
CBD offices – high-rise prestige 43,320 747 2,221
Education
University 43,320 747 2,221
Hospitals
General hospital (eg city teaching hospital) 33,060 570 1,695
Hotels
3 star travellers 43,320 747 2,221
5 star luxury 85,500 1,474 4,384
Resort style 54,720 943 2,806
Industrial
Warehouse/factory units – basic 29,420 507 1,508
Residential
Aged care/affordable units 20,520 354 1,052
Retail
Large shopping centre including mall 43,320 747 2,221

India – international building costs INR USD Purchasing
58.00)
Composite
Blockwork in wall (m2) (10,000 block job) 1,300 22 67
Plasterboard 13mm thick to stud wall (m2) (3,000m2 job) 4,000 69 205
Ceramic tiling (m2) (1,000m2 job) 3,146 54 161
Vinyl flooring to wet areas (m2) (500m2 job) 2,360 41 121
Carpet medium tufted (m2) (4,500m2 job) 2,462 42 126
Lighting installation (m2) (5,000m2+ job) 2,300 40 118
Labour
Site foreman 90 2 5
Material
Concrete 30 MPa (m3) (1,500m3 job) 5,525 95 283
Concrete block (400x200) per 1,000 (>10,000 block job) 36,750 634 1,884
Structural steel beams (tonne) (100 tonne + job) 56,000 966 2,871
Plant
Hire 50t mobile crane + operator (day) 16,020 276 821
Market: getting cooler Bangalore 104

Tendering: warm Chennai 96
Cost escalation: 7% Kolkata 96
Contractors’ margin: 16% Mumbai 100
Preliminaries: 9% New Delhi 97

Ireland
Low demand and high competition are keeping prices down
The Irish construction sector has shrunk considerably Some projects are coming through in the public sector,
since 2006, with 34 percent fewer firms in 2013 thanks to the government’s school-building programme,
compared to then. Skills and expertise have been lost, its purchasing power parity stimulus package,
with professionals and tradespeople moving to work and spending on maintenance and energy-efficiency
overseas. At the height of Ireland’s construction boom, measures for schools, roads and local authority housing.
273,000 people were directly employed in the sector, Despite this, construction opportunities overall are down.
a figure that had shrunk to 99,600 in 2012.
Tender prices are competitive and high levels of
GDP growth remains below one percent in 2013 as Ireland unemployment in construction will keep construction
faces weaker demand from Europe and the UK. Domestic cost increases to a minimum for several years. Gradually,
demand is hampered by continued austerity measures as the European and US economies improve over 2014–15,
aimed at correcting fiscal imbalance; its effects include Ireland will benefit through improved demand and the
a lack of development finance, weak confidence and relaxation of austerity measures.
low demand.
Data for Northern Ireland is included in UK figures
on pages 52–53.
0.76)
Airports
Carparks
Commercial
Education
University 2,030 2,671 3,928
Hospitals
Hotels
3 Star travellers 1,570 2,066 3,038
5 Star luxury 2,780 3,658 5,379
Resort style 2,020 2,658 3,909
Industrial
Large warehouse distribution centre 890 1,171 1,722
High tech factory/laboratory 1,600 2,105 3,096
Residential
Retail

Ireland – international building costs EUR USD Purchasing
0.76)
Composite
Reinforcement in beams (tonne) 950 1,249 1,837
Single solid core door incl frame and hardware (50 door job) 742 976 1,435
Labour
Material
Reinforcement bar 16mm (tonne) (120 tonne job) 750 986 1,451
Plant
Market: staying the same

Tendering: cold
Cost escalation: 2%
Preliminaries: 10%

Japan
‘Abenomics’ helps Japan to rise again
Are the years of stagnation for the Japanese economy The news in September 2013 that Tokyo will host the 2020
coming to an end? The signs look positive. Olympics is also positive for the construction sector, with
investment in stadiums, housing and transport expected.
Business conditions are recovering, with the share
market rising 42 percent between January and the Reports of sporadic skills shortages in key construction
end of September 2013. GDP growth is positive again trades means that cost escalation is presently a little
as ‘Abenomics’, the policies of Prime Minister Shinzō Abe, higher than in other developed economies.
take effect. These include further monetary easing,
tax breaks and a weaker currency, which will stimulate
Japanese export growth.
Property prices look set to rise. New housing starts

have increased by nearly 15 percent in the last year.
Rebuilding after the 2011 tsunami has also added
to construction activity.
International building costs JPY USD Purchasing

97.90)
Airports
Carparks
Multistorey – above ground 205,300 2,097 2,974
Commercial
Education
University 186,300 1,903 2,699
Hospitals
Hotels
3 star travellers 349,000 3,565 5,055
5 star luxury 523,400 5,346 7,581
Resort style 289,500 2,957 4,193
Industrial
Residential
Retail

Japan – international building costs JPY USD Purchasing
97.90)
Composite
Reinforcement in beams (tonne) 97,000 991 1,405
Formwork to soffit of slab (m2) 2,680 27 39
Copper pipe 15mm to wall (m) (1,000m+ job) 2,290 23 33
Fire sprinklers (per m2) (5,000m2 job) 4,000 41 58
Labour
Group 1 tradesman eg plumber/electrician 2,400 25 35
Group 2 tradesman eg carpenter/bricklayer 2,210 23 32
Group 3 tradesman eg carpet layer, tiler, plasterer 2,140 22 31
General labourer 1,700 17 25
Site foreman 2,440 25 35
Material
Reinforcement bar 16mm (tonne) (120 tonne job) 66,000 674 956
Standard brick per 1,000 97,500 996 1,412
Softwood timber for framing 100mm x 50mm (m) 1,210 12 18
Plant
Market: getting warmer

Tendering: warm
Cost escalation: 5%
Preliminaries: 15%

Malaysia
Road, rail and major housing projects will drive costs up from low base
Malaysia is making fresh progress towards its goal of The government is also planning large public housing
achieving developed nation status by 2020. And a major schemes. Rolled out progressively between now and
part of its strategy is an ambitious construction plan. 2020, these developments will provide a boost to the
construction sector.
The Economic Transformation Programme (ETP) includes
USD52bn of new rail and road projects. Among these For now, Malaysia remains a low-cost country
projects are new light rail transit extensions, mass rapid for construction. Shortages of skilled labour are,
transit systems and a high-speed railway between Kuala however, likely to increase costs in the future.
Lumpur and Singapore.
International building costs MYR USD Purchasing

3.23)
Airports
Carparks
Commercial
Education
University 4,600 1,424 3,049
Hospitals
Hotels
5 star luxury 8,920 2,762 5,912
Resort style 9,330 2,889 6,183
Industrial
Residential
Retail

Malaysia – international building costs MYR USD Purchasing
3.23)
Composite
Labour
Material
Plant
Market: getting warmer Georgetown 97

Tendering: lukewarm Ipoh 97
Cost escalation: 3% Johor Bahru 88
Contractors’ margin: 8% Kuala Lumpur 100
Preliminaries: 10% Kuching 112

Netherlands
Projects thin on the ground – beware of low bids
Despite being the fifth biggest economy in the Purchasing power parity projects are currently
eurozone and its third largest exporter, GDP growth one of the more buoyant construction sectors.
in the Netherlands fell during 2013. New housing projects But overall, infrastructure growth is down and
are decreasing and business confidence remains firmly private sector construction is subdued.
in negative territory.
Tenders are very competitive. Cost escalation
The forecast for 2014 economic growth was cut by another is low, but low-value submissions are adding
quarter of a percentage point to 0.5 percent recently. to commercial risk.
This reflects the €6bn in austerity measures needed to
bring Dutch public finances close to eurozone targets.
These measures, combined with weaker export demand,
mean unemployment has risen by nearly two percent since
July 2012, to 8.7 percent.

0.76)
Airports
Carparks
Commercial
Education
University 1,870 2,461 3,117
Hospitals
Regional Hospital 2,500 3,289 4,167
General Hospital (eg city teaching hospital) 3,000 3,947 5,001
Hotels
5 star luxury 2,770 3,645 4,617
Resort style 2,330 3,066 3,884
Industrial
Warehouse/factory units – basic 890 1,171 1,484
Residential
Retail

Netherlands – international building costs EUR USD Purchasing
0.76)
Composite
Curtain wall glazing incl support system (m2) (1,000m2 job) 632 831 1,053
Labour
Material
Plant
Market: getting cooler Amsterdam 103

Tendering: cold Rotterdam 98
Cost escalation: 2% The Hague 100
Preliminaries: 13%

Oman
Construction activity increasing, with major projects planned
The Sultanate of Oman was insulated for the most International Airport and Salalah Airport, projected to
part from the negative effects of the global financial complete in 2015, and the development of international
crisis, thanks to increased oil revenue. The government, ports at Duqm, Muscat, Salalah and Sohar.
in its eighth five-year Development Plan (2011–15),
announced over OMR5.6bn of state spending on education, As the country continues to develop its infrastructure and
healthcare, defence, transport infrastructure, and oil and industry to move away from its historic reliance on oil and
gas field development. gas production, a broad increase in construction activity
is expected over the immediate future.
While private investment lags behind, groundwork is being
established for secure future investment, as Oman remains
one of the most politically and economically stable of the
GCC countries. Major projects include the Muscat
International building costs OMR USD Purchasing

0.38)
Airports
Low-cost carrier – basic service 950 2,500 5,061
Carparks
Multistorey – above ground 360 947 1,918
Commercial
Offices – business park 410 1,079 2,184
CBD offices – up to 20 floors medium (A-grade) 510 1,342 2,717
CBD offices – high-rise prestige 690 1,816 3,676
Education
Primary and secondary schools 590 1,553 3,143
University 670 1,763 3,569
Hospitals
Day centre (including basic surgeries) 590 1,553 3,143
Regional hospital 740 1,947 3,942
General hospital (eg city teaching hospital) 900 2,368 4,794
Hotels
3 star travellers 920 2,421 4,901
5 star luxury 1,230 3,237 6,552
Resort style 1,490 3,921 7,937
Industrial
High-tech factory/laboratory 620 1,632 3,303
Residential
Individual detached house – medium standard 620 1,632 3,303
Townhouses – medium standard 540 1,421 2,877
Apartments – private medium density 560 1,474 2,983
Apartments – high rise 670 1,763 3,569
Aged care/affordable units 490 1,289 2,610
Retail
Large shopping centre including mall 670 1,763 3,569
Neighbourhood incl supermarket 720 1,895 3,835
Prestige car showroom 970 2,553 5,167

Oman – international building costs OMR USD Purchasing
0.38)
Composite
Labour
Material
Reinforcement bar 16mm (tonne) (120 tonne job) 311 817 1,654
Concrete block (400x200) per 1,000 (>10,000 block job) 375 986 1,996
Standard brick per 1,000 268 704 1,426
Structural steel beams (tonne) (100 tonne + job) 589 1,550 3,137
Plant
Hire 50t mobile crane + operator (day) 627 1,650 3,340

Tendering: lukewarm
Cost escalation: 2%
Preliminaries: 10%

Poland
Costs stable in the short-term, but construction activity likely to increase from 2014
During 2013, the Polish construction market has slowed. Unemployment in Poland has been rising since late
This follows several years of strong growth, in line with the 2008, and grew from 9.9 percent in January 2012 to
country’s GDP growth rates, which have been among the 10.7 percent in March 2013. Inflation is well under control,
highest in the EEC countries. and construction costs are expected to grow very little
over the next 12 months, with a predicted cost escalation
The market for apartments appears to be temporarily of just two percent.
oversupplied, and activity in the civil engineering sectors
of roads, water and energy is also slowing. Bankruptcies By 2014, the sector is likely to start picking up in line
among construction firms increased during 2012–13 with improving European growth. EU funding of €72.9bn
as the market flattened out. between 2014 and 2020 – a third of which is aimed
at infrastructure and the environment – is likely to give
the Polish construction market a further boost.
International building costs PLN USD Purchasing

3.17)
Airports
Carparks
Commercial
Education
University 3,500 1,104 3,012
Hospitals
Hotels
5 star luxury 6,500 2,050 5,594
Resort style 4,500 1,420 3,873
Industrial
Residential
Retail

Poland – international building costs PLN USD Purchasing
3.17)
Composite
Labour
Material
Plant
Market: getting cooler

Tendering: warm
Cost escalation: 2%
Preliminaries: 14%

Qatar
Major projects on the horizon will lead price rises from late 2014
With a booming gas export industry and extensive Qatar’s National Vision target of becoming an advanced
local development plans to meet the FIFA World Cup economy by 2030 includes ambitious construction
commitment and the 2030 National Vision, Qatar’s projects in transportation, such as a long-distance
construction industry is poised to expand by an average freight and passenger railway, social infrastructure
of 12 percent a year over the next ten years. By 2021, and housing. Several new ports are also planned
the value of the construction industry should double to improve import capacity.
to USD15bn per annum in real terms.
Expect cost escalation on local commodities such
The robust programme of development activities as concrete, sand and aggregate in the shorter term,
comprises signature FIFA World Cup projects including with the cost of imported equipment from Japan and
a new metro system, expressways, a road tunnel under Europe remaining competitive. Once major tenders have
Doha Bay, 12 stadiums and over 200 hotels. been awarded, expect all costs to rise more significantly
from late 2014 onwards.
International building costs QAR USD Purchasing

3.64)
Airports
Carparks
Commercial
Education
University 7,000 1,923 3,506
Hospitals
Hotels
5 star luxury 12,450 3,420 6,235
Resort style 13,200 3,626 6,610
Industrial
Residential
Retail

Qatar – international building costs QAR USD Purchasing
3.64)
Composite
Labour
Material
Plant

Tendering: warm
Cost escalation: 3.6%
Preliminaries: 11%

Russia
Housing, commercial and infrastructure all on the up
The Russian construction market is experiencing strong More than 50 percent of construction activities,
growth, in contrast to the weak overall economy. This is however, are accounted for by the infrastructure sector.
due to an increase in residential construction, combined This includes construction in the oil and gas sector and
with non-residential and infrastructure projects connected development of transport infrastructure, including roads,
to the 2014 Winter Olympics and the 2018 FIFA World Cup. railways and airport expansions, in preparation for the
2018 FIFA World Cup. Construction of eight of the
A record 66 million m2 of residential space was constructed 12 stadiums planned is expected to start in 2014.
in 2012, a large percentage of which was affordable
housing encouraged by the government’s 2030 housing
strategy. Rising house prices are expected to sustain this
high output trend.
International building costs RUB USD Purchasing

33.00)
Airports
Carparks
Commercial
Education
University 77,550 2,350 3,838
Hospitals
Hotels
3 star travellers 58,740 1,780 2,907
5 star luxury 90,420 2,740 4,475
Resort style 77,550 2,350 3,838
Industrial
Residential
Retail

Russia – international building costs RUB USD Purchasing
33.00)
Composite
Curtain wall glazing incl support system (m2) (1,000m2 job) 28,050 850 1,388
Labour
Material
Plant
Market: getting warmer Moscow 100

Tendering: warm St Petersburg 92
Cost escalation: 5% Yekaterinburg 87
Preliminaries: 8%

Singapore
Growth continues, contractors face skills shortages
Singapore’s construction sector continued to grow Public sector demand is expected to strengthen
in the first half of 2013, although the rate of GDP growth significantly, however, contributing between SGD14bn
slowed as the year progressed to 5.1 percent by the end and SGD17bn – or around half of industry demand –
of the second quarter, compared to 7.3 percent at the end in 2013. This is due to the rescheduling of some major
of the first quarter. public housing and civil engineering projects, now to be
tendered in 2013, and the ramping up of public housing
The value of contracts awarded in both the public and and rail construction. The public mass rapid transit
private sectors slowed down, resulting in a 27 percent infrastructure expansion programme remains strong,
year-on-year decline at the end of the second quarter. with preparations taking place for the next major roll-out
Total construction output in 2013 is projected to be of rail and road construction contracts in 2013 and 2014.
between SGD1bn and SGD33bn in 2013, moderating
between SGD26bn and SGD33bn in 2014 and 2015. Contractors have been complaining about professional and
labour skills shortage, in part due to tighter restrictions on
overseas workers, which have been leading to higher wage
bills. Low-margin bids and the widespread use of lump sum
contracts make it difficult to recover costs.
International building costs SGD USD Purchasing

1.27)
Airports
Carparks
Commercial
Education
University 2,770 2,181 3,043
Hospitals
Hotels
5 star luxury 4,310 3,394 4,734
Resort style 5,150 4,055 5,657
Industrial
Residential
Retail

Singapore – international building costs SGD USD Purchasing
1.27)
Composite
Labour
Material
Concrete block (400x200) per 1,000 (>10,000 block job) 700 551 769
Plant

Tendering: lukewarm
Cost escalation: 3%
Preliminaries: 10%

South Africa
Residential and commercial sectors sluggish, but retail on the rise
South Africa’s economy weakened in 2012–13 due Confidence in the industry is expected to increase
to two factors: lower global demand for resources and under forecasts of lower interest rates and slightly
labour strikes, with workers demanding wage increases firmer exchange rates in the immediate future. However,
above the high rate of inflation. The falling exchange rate recovery is likely to be modest, due to poor economic
is adding to the cost of imports, though this makes exports growth, slower growth in consumer spending and
more competitive. labour unrest.
Residential construction remained sluggish, trapped in a Construction cost increases of more than ten percent
cyclical low. After a few years of operating below capacity, are being driven by large annual trade wage increases,
the commercial sector, on the other hand, is now healthy increased demand for local materials from the retail
and recovering. However, there has been demand in the sector and higher imported material costs.
retail sector which looks set to continue. The public sector
has added to the overall level of construction work,
with projects in several sectors, such as transportation
and power generation.
International building costs ZAR USD Purchasing

9.80)
Airports
Carparks
Multistorey – below ground 5,270 538 935
Commercial
Education
University 10,530 1,074 1,867
Hospitals
Hotels
3 star travellers 10,060 1,027 1,784
5 star luxury 12,290 1,254 2,179
Resort style 11,700 1,194 2,075
Industrial
Residential
Retail

South Africa – international building costs ZAR USD Purchasing
9.80)
Composite
Labour
Material
Plant
Market: getting cooler Gauteng 100

Tendering: lukewarm Kwazulu/Natal 101
Cost escalation: 9% Western Cape 103
Preliminaries: 11%

South Korea
Housing slowdown hits construction
South Korea is now facing its worst property market Korea’s exceptional manufacturing growth is now
slowdown since 2004. Residential building permits threatened by its strong currency which, against the
fell 24.4 percent in the first half of 2013 from a year weakened yen, is gradually eroding Korea’s competitive
earlier, while housing starts dropped 19.2 percent advantage. Static inflation and the slowdown in the
in the same period. property sector should keep construction costs down
during 2013–14.
With tightening credit conditions, falling property
values and the expiry of temporary tax breaks
on property acquisition, domestic construction
is weakening. Infrastructure construction, on the
other hand, is experiencing moderate growth.
International building costs KRW USD Purchasing

per m2 of internal area, in 2013 (exchange rate: 1,114.00) power
parity
Airports
Domestic terminal – full service 2,626,500 2,358 6,481
Low-cost carrier – basic service 1,838,550 1,650 4,537
Carparks
Commercial
Offices – business park 1,133,000 1,017 2,796
CBD offices – up to 20 floors medium (A-grade) 1,390,500 1,248 3,431
CBD offices – high-rise prestige 1,751,000 1,572 4,321
Education
Primary and secondary schools 1,030,000 925 2,542
University 1,400,800 1,257 3,457
Hospitals
Day centre (including basic surgeries) 1,133,000 1,017 2,796
Regional hospital 1,648,000 1,479 4,067
General hospital (eg city teaching hospital) 1,751,000 1,572 4,321
Hotels
3 star travellers 1,545,000 1,387 3,812
5 star luxury 3,296,000 2,959 8,133
Resort style 2,111,500 1,895 5,210
Industrial
High-tech factory/laboratory 2,678,000 2,404 6,608
Residential
Individual detached house – medium standard 1,184,500 1,063 2,923
Individual detached house – prestige 1,751,000 1,572 4,321
Townhouses – medium standard 1,400,800 1,257 3,457
Apartments – private medium density 1,133,000 1,017 2,796
Apartments – high rise 1,442,000 1,294 3,558
Aged care/affordable units 1,236,000 1,110 3,050
Retail
Large shopping centre including mall 1,750,000 1,571 4,318
Prestige car showroom 1,926,100 1,729 4,753

South Korea – international building costs KRW USD Purchasing
per m2 of internal area (exchange rate: 1,114.00) power
parity
Composite
Excavate basement (m3) (1,800m3 job) 6,489 6 16
Excavate footings (m) 6,489 6 16
Reinforcement in beams (tonne) 1,251,450 1,123 3,088
Structural steel beams (tonne) 2,008,500 1,803 4,956
Painting to walls primer + 2 coats (m2) 4,635 4 11
Labour
Material
Reinforcement bar 16mm (tonne) (120 tonne job) 1,032,060 926 2,547
Structural steel beams (tonne) (100 tonne + job) 1,176,000 1,056 2,902
13 mm plasterboard (m2) 3,205 3 8
Emulsion paint (litre) 3,063 3 8
Copper pipe 15 mm (m) (1,000m+ job) 6,526 6 16
Plant
Market: getting cooler

Tendering: cold
Cost escalation: 3%
Preliminaries: 12%

UAE
Rapid recovery will stretch construction sector
Though the UAE economy was affected by the global Construction cost escalation is still moderate but set
recession, it has rapidly regained much of its past to increase as USD350bn of announced projects get
momentum. The economy grew by 4.4 percent underway, stretching the capacity of the construction
in 2012, partly due to recovery in construction activity. sector. While some mega developments are in this mix,
there has been a general shift in the region away from
Prospects are strongest in Abu Dhabi, where demand residential and commercial projects to large social
tends to exceed supply in the commercial and retail and transport infrastructure projects.
sectors and the government continues to invest in
key infrastructure projects to support the 2030 vision
of a diversified economy. Dubai is a little further behind
in the upswing, although property values are now
increasing, bank lending is growing and tourism
is thriving again.
International building costs AED USD Purchasing

3.67)
Airports
Carparks
Commercial
Education
University 6,660 1,815 3,833
Hospitals
Hotels
5 star luxury 12,300 3,351 7,080
Resort style 14,860 4,049 8,553
Industrial
Residential
Retail

UAE – international building costs AED USD Purchasing
3.67)
Composite
Labour
Material
Plant

Tendering: lukewarm
Cost escalation: 2%
Preliminaries: 12%

Uganda
Government investment signals sustainable construction growth
After a period of sluggish growth, Uganda’s construction Private sector investment is still subdued, hampered
market is showing signs of more rapid growth following by high borrowing costs introduced to control spiralling
the recent announcement of several large projects. inflation levels, which reached a high of 30.5 percent
Government investment in infrastructure and public in October 2011.
facilities – including roads, energy, schools and hospitals
– has been increasing steadily. Uganda’s economy is expected to be further boosted when
oil production begins, scheduled for 2018. This will require
With the help of foreign investment, particularly from construction of wells, pipelines, roads and a refinery.
China, several high-profile projects have recently been
announced by the government. These include the
USD1.4bn Karuma hydropower dam across the River Nile
and a new railway line between Kenya and Rwanda,
running through Uganda.
International building costs UGX USD Purchasing

per m2 of internal area, in 2013 (exchange rate: 2,595.00) power parity
Airports
Carparks
Multistorey – above ground 1,014,000 420 599
Multistorey – below ground 887,250 450 524
Commercial
Offices – business park 2,154,750 830 1,273
CBD offices – up to 20 floors medium (A-grade) 2,281,500 879 1,348
CBD offices – high-rise prestige 3,491,680 1,346 2,064
Education
Primary and secondary schools 1,521,000 580 899
University 1,774,500 650 1,049
Hospitals
Day centre (including basic surgeries) 2,166,830 835 1,281
Regional hospital 2,408,250 928 1,423
Hotels
3 star travellers 3,171,430 1,222 1,874
5 star luxury 3,794,560 1,462 2,243
Resort style 3,687,130 1,421 2,179
Industrial
Warehouse/factory units – basic 1,267,500 350 749
Large warehouse distribution centre 1,267,500 380 749
High-tech factory/laboratory 3,168,750 950 1,873
Residential
Individual detached house – medium standard 1,954,040 370 1,155
Individual detached house – prestige 3,295,500 620 1,948
Townhouses – medium standard 2,122,040 550 1,254
Apartments – private medium density 2,028,000 641 1,199
Apartments – high rise 2,509,370 770 1,483
Aged care/affordable units 1,521,000 350 899
Retail
Large shopping centre including mall 2,205,620 1,200 1,303
Neighbourhood incl supermarket 1,930,680 800 1,141
Prestige car showroom 2,068,220 797 1,222

Uganda – international building costs UGX USD Purchasing
per m2 of internal area (exchange rate: 2,595.00) power parity
Composite
Single solid core door incl frame and hardware (50 door job) 1,140,750 440 674
Labour
Material
Reinforcement bar 16mm (tonne) (120 tonne job) 4,056,000 1,563 2,397
Concrete block (400x200) per 1,000 (>10,000 block job) 3,549,000 1,368 2,097
Copper cable (m) (3C + E, 2.5mm PVC) (100,000m+ job) 50,700 20 30
Plant
Hire 50t mobile crane + operator (day) 3,373,500 1,300 1,994

Tendering: lukewarm
Cost escalation: 5%
Preliminaries: 8%

UK
Growth again, but concentrated in London and the South East
After several tough years, the UK economy is picking up primarily in high-end property in the South East,
in certain sectors and locations. GDP growth had increased but set to ripple out from there.
to 1.5 percent year-on-year by the third quarter of 2013,
unemployment was stable at 7.7 percent, and business The government also announced an infrastructure
confidence is now well into positive territory. Despite this, spending boost of £100bn after its June spending review.
construction is still 13.3 percent down from its 2008 peak. However, many of these projects, which will include road,
rail and energy, will take some time to start feeding
The government has introduced various schemes to boost through in capital expenditure terms.
housing, including shared equity where first-time buyers
can receive a government loan. This is helping the housing Construction wages have not risen for several years and
market to grow again, prompting premature warnings of some spare capacity still exists, so construction cost
a housing bubble. increases will be minimal until mid-2014. The exception
to this will be the South East.
Fuelled by low interest rates and undersupply,
the rejuvenated real estate sector will help boost
construction activity and lead growth in the rest of the
economy. However, it is still early days, with growth
International building costs GBP USD Purchasing

0.65)
Airports
Carparks
Multistorey – above ground 550 846 1,020
Commercial
Education
University 2,280 3,508 4,230
Hospitals
Hotels
5 star luxury 2,620 4,031 4,860
Resort style 2,300 3,538 4,267
Industrial
Residential
Retail

United Kingdom – international building costs GBP USD Purchasing
0.65)
Composite
Labour
Material
Plant
Market: getting warmer East Anglia Region 83

Tendering: lukewarm East Midlands Region 83
Cost escalation: 3% Greater London 86
Contractors’ margin: 4% Northern Ireland 80
Preliminaries: 12% Northern Region 87
North West Region 87
Scotland 89
South East Region (excluding Greater London) 89
South West Region 93
Wales 96
West Midlands Region 99
Source BCIS, Turner & Townsend Yorkshire and Humberside Region 100

US
Signs of recovery, but it’s still early days
The US economy has improved considerably during 2013, gradual recovery in construction, with housing, industrial
with the all-important housing sector starting to stage and gas projects leading the way. However, it is still early
a comeback. This follows a 30–40 percent decrease in in the recovery cycle.
house prices since 2006, as the market corrected itself.
There is a large disparity in costs across the US, with the
The manufacturing sector is also growing again. This is Northeast far more expensive than the South and
thanks to labour costs, which are now low by international Southwest. Closed shop conditions and strong labour
standards, and to cheaper energy prices due to the unions keep wages high in the Northeast, compared
availability of home-grown shale gas. to other regions where open shop labour laws apply.
Equity valuations are high and confidence is improving now Until construction volumes increase substantially,
that a relaxation of the Fed’s policy of quantitative easing is cost increases are likely to remain moderate.
expected over the next 12 months. This all bodes well for a
International building costs USD Purchasing

per m2 of internal area, in 2013 power parity
Airports
Domestic terminal – full service 3,620 3,516
Low-cost carrier – basic service 2,530 2,457
Carparks
Multistorey – above ground 710 690
Multistorey – below ground 1,340 1,302
Commercial
Offices – business park 1,920 1,865
CBD offices – up to 20 floors medium (A-grade) 2,180 2,117
CBD offices – high-rise prestige 2,570 2,496
Education
Primary and secondary schools 1,600 1,554
University 2,240 2,176
Hospitals
Day centre (including basic surgeries) 2,100 2,040
Regional hospital 3,410 3,312
General hospital (eg city teaching hospital) 3,370 3,273
Hotels
3 star travellers 1,610 1,564
5 star luxury 2,650 2,574
Resort style 2,350 2,283
Industrial
Warehouse/factory units – basic 880 855
Large warehouse distribution centre 1,160 1,127
High-tech factory/laboratory 1,820 1,768
Residential
Individual detached house – medium standard 1,520 1,476
Individual detached house – prestige 1,840 1,787
Townhouses – medium standard 1,380 1,340
Apartments – private medium density 1,630 1,583
Apartments – high rise 2,140 2,079
Aged care/affordable units 1,580 1,535
Retail
Large shopping centre including mall 2,000 1,943
Neighbourhood incl supermarket 1,400 1,360
Prestige car showroom 2,600 2,525

US – international building costs USD Purchasing
per m2 of internal area power parity
Composite
Excavate basement (m3) (1,800m3 job) 10 10
Excavate footings (m) 18 17
Concrete in slab (m3) (1,500m3 job) 174 169
Reinforcement in beams (tonne) 1,600 1,554
Formwork to soffit of slab (m2) 72 70
Blockwork in wall (m2) (10,000 block job) 77 74
Structural steel beams (tonne) 2,912 2,829
Pre-cast concrete wall (m2) 122 119
Curtain wall glazing incl support system (m2) (1,000m2 job) 791 768
Plasterboard 13mm thick to stud wall (m2) (3,000m2 job) 35 34
Single solid core door incl frame and hardware (50 door job) 1,100 1,068
Painting to walls primer + 2 coats (m2) 10 10
Ceramic tiling (m2) (1,000m2 job) 75 73
Vinyl flooring to wet areas (m2) (500m2 job) 65 63
Carpet medium tufted (m2) (4,500m2 job) 45 44
Lighting installation (m2) (5,000m2+ job) 85 82
Copper pipe 15mm to wall (m) (1,000m+ job) 33 32
Fire sprinklers (per m2) (5,000m2 job) 60 58
Air conditioning incl main plant (m2) (5,000m2+ job) 155 151
Labour
Group 1 tradesman eg plumber/electrician 76 74
Group 2 tradesman eg carpenter/bricklayer 66 64
Group 3 tradesman eg carpet layer, tiler, plasterer 58 56
General labourer 54 52
Site foreman 78 76
Material
Concrete 30 MPa (m3) (1,500m3 job) 125 121
Reinforcement bar 16mm (tonne) (120 tonne job) 1,012 983
Concrete block (400x200) per 1,000 (>10,000 block job) 1,051 1,020
Standard brick per 1,000 357 347
Structural steel beams (tonne) (100 tonne + job) 2,052 1,993
Glass pane 10mm tempered (m2) 237 230
Softwood timber for framing 100mm x 50mm (m) 3 3
13 mm plasterboard (m2) 5 5
Emulsion paint (litre) 5 5
Copper pipe 15 mm (m) (1,000m+ job) 7 7
Copper cable (m) (3C + E, 2.5mm PVC) (100,000m+ job) 4 4
Plant
Hire 50t mobile crane + operator (day) 2,520 2,448
Market: getting warmer Chicago 105

Tendering: lukewarm Houston 82
Cost escalation: 2% Los Angeles 100
Contractors’ margin: 4% New York 125
Preliminaries: 9% Philadelphia 113

Vietnam
Construction volumes growing – but start from a low base
Inflation in Vietnam is now a more manageable 7.2 percent The residential sector is the strongest construction sector,
after reaching 22 percent in late 2012. Growth at five with apartments dominating, although these are beginning
percent is moderate; efforts to reform and stimulate to become oversupplied at higher price points, for now.
the economy have had mixed results. This has caused problems with non-performing loans.
There is still massive opportunity in construction. Construction volumes are growing strongly, off a low
But there is insufficient financial strength to carry base. Construction wages are low, but systemic inflation
out all the infrastructure and building works needed will ensure construction costs keep rising, even if they
to modernise the economy. remain low by world standards.
International building costs VND USD Purchasing

21,200.00)
Airports
Carparks
Multistorey – above ground 7,862,400 371 1,108
Multistorey – below ground 16,338,070 771 2,303
Commercial
Offices – business park 14,004,060 661 1,974
CBD offices – up to 20 floors medium (A-grade) 17,505,070 826 2,468
CBD offices – high-rise prestige 19,586,810 924 2,761
Education
Primary and secondary schools 11,681,280 551 1,647
University 14,017,540 661 1,976
Hospitals
Day centre (including basic surgeries) 14,902,620 703 2,101
Regional hospital 28,680,690 1,353 4,044
Hotels
3 star travellers 28,062,030 1,324 3,956
5 star luxury 37,019,320 1,746 5,219
Resort style 31,674,240 1,494 4,466
Industrial
Warehouse/factory units – basic 9,246,180 436 1,304
Large warehouse distribution centre 9,371,980 442 1,321
High-tech factory/laboratory 16,353,790 771 2,306
Residential
Individual detached house – medium standard 13,990,580 660 1,972
Individual detached house – prestige 15,156,460 715 2,137
Townhouses – medium standard 11,658,820 550 1,644
Apartments – private medium density 15,156,460 715 2,137
Apartments – high rise 17,488,220 825 2,466
Aged care/affordable units 11,658,820 550 1,644
Retail
Large shopping centre including mall 15,171,060 716 2,139
Neighbourhood incl supermarket 11,670,050 550 1,645
Prestige car showroom 12,837,050 606 1,810

Vietnam – international building costs VND USD Purchasing
per m2 of internal area (exchange rate: 21,200.00) power parity
Composite
Concrete in slab (m3) (1,500m3 job) 1,555,200 73 219
Curtain wall glazing incl support system (m2) (1,000m2 job) 9,720,000 458 1,370
Single solid core door incl frame and hardware (50 door job) 5,660,928 267 798
Labour
Material
Concrete 30 MPa (m3) (1,500m3 job) 1,215,778 57 171
Reinforcement bar 16mm (tonne) (120 tonne job) 18,695,880 882 2,636
Concrete block (400x200) per 1,000 (>10,000 block job) 6,183,000 292 872
Standard brick per 1,000 1,566,000 74 221
Glass pane 10mm tempered (m2) 1,144,800 54 161
Copper cable (m) (3C + E, 2.5mm PVC) (100,000m+ job) 37,800 2 5
Plant
Hire 50t mobile crane + operator (day) 25,440,000 1,200 3,587
Market: staying the same Hanoi 92

Tendering: lukewarm Ho Chi Minh City 100
Cost escalation: 5%
Preliminaries: 10%

Purchasing power parity
Turner & Townsend has worked with Bond University, The values in the purchasing power parity columns in the
Queensland, to develop a more reliable method for report express local costs in terms of purchasing power by
comparing international construction costs. weighting them according to the basket priced in-country.
The higher the purchasing power parity-adjusted cost, the
There are two major reasons why construction costs higher are the relative costs of building in one country over
between countries cannot be compared reliably using another. When making relative cost comparisons between
currency exchange rates. First, this method fails to take cities in different countries, purchasing power parity is the
account of local living standards. And second, exchange correct methodology to apply.
rates are highly volatile.
In countries where cheap labour predominates, the value
Take Australia and the US as an example. In 2001, of the basket is lower to reflect lower living standards. The
1 AUD = 0.5 USD. In 2012, 1 AUD = 1.08 USD. Yet the choice of items in the standard basket is based on typical
relative prices (or purchasing power) of construction items construction items available globally.
remained virtually unchanged.
Use of purchasing power parity to compare cost
Purchasing power parity is a more reliable way of performance over time should be aware of current market
comparing prices. Although used in other areas of conditions in each location, therefore after converting
economics, its application in this survey and report is the all costs to a common year, further adjustment (perhaps
first attempt to properly compare international ± ten percent) for abnormal levels of competition may
construction costs. be required.
We use a standard basket of equally weighted construction Turner & Townsend is grateful to Bond University’s
items, comprising material, labour and plant, to calculate Institute of Sustainable Development and Architecture for
purchasing power parity values in each country. The assistance with this methodology. Further background on
average price of items in the standard basket for a comparing international construction performance
particular country is then divided by the average price can be accessed from http://epublications.bond.edu.au/
for a ‘base country’ to calculate relative purchasing sustainable_development/150/
power parity.
In this report, trade, labour and material prices and prices per m2 are
indicative, and should not be relied on without first obtaining advice
from a qualified professional person. Costs are dependent on building
design, inclusions, exclusions, and site conditions. Cost comparisons
between countries are subject to different interpretations, building
methods, and standards for costing, measurement and construction.
Costs may vary substantially between regions within countries. Turner
& Townsend plc and its subsidiaries, the authors and contributors,
expressly disclaim all and any liability and responsibility to any person
in respect of anything done or omitted to be done in reliance wholly or
in part upon the whole of the contents of this publication.
We value your feedback, please get in touch at

gary.emmett@turntown.com

www.turnerandtownsend.com

A Brighter Outlook: International Construction Cost Survey 2013

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A brighter

Asia, parts of Europe, the Middle East

The start of a global recovery is

economies – including China, India,

International construction cost survey 2013 1

The methodology allows a true

2 Turner & Townsend

International construction cost survey 2013 3

4 Turner & Townsend

International construction cost survey 2013 5

6 Turner & Townsend

International construction cost survey 2013 7

Figure 4. Strong competition is keeping tenders competitive in the majority of markets

Intense competition, not

8 Turner & Townsend

Figure 6. Difference in preliminaries, depending on project’s location

International construction cost survey 2013 9

10 Turner & Townsend

International construction cost survey 2013 11

Housing recovery is set to be the next growth sector.

International building costs AUD USD Purchasing

12 Turner & Townsend

Market: staying the same Adelaide 95

International construction cost survey 2013 13

Over the next five years, construction spending in the

International building costs Real USD Purchasing

14 Turner & Townsend

Market: getting warmer Belo Horizonte 87

International construction cost survey 2013 15

International building costs CAD USD Purchasing

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Market: getting warmer Calgary 113

International construction cost survey 2013 17

International building costs CNY USD Purchasing

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Market: getting cooler Beijing 97

International construction cost survey 2013 19

International building costs EUR USD Purchasing

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Excavate basement (m3) (1,800m3 job) 14 18 21

Market: getting warmer Berlin 90

International construction cost survey 2013 21

International building costs HKD USD Purchasing

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Market: staying the same

International construction cost survey 2013 23

Despite the short-term weakness, the outlook for the

International building costs INR USD Purchasing

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Market: getting cooler Bangalore 104

International construction cost survey 2013 25

26 Turner & Townsend

Market: staying the same

International construction cost survey 2013 27

Property prices look set to rise. New housing starts

International building costs JPY USD Purchasing

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Market: getting warmer

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International building costs MYR USD Purchasing

30 Turner & Townsend

Market: getting warmer Georgetown 97

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