International Construction Cost Survey 2013

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A brighteroutlookInternational constructioncost survey 2013


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After an unprecedented period of global economic

instability, things are beginning to slowly improve.

Many markets remain fragile but its clear that sentimentis improving. With recovery comes opportunity, and some

key markets around the world are showing sustainable

signs of growth.

Given this context, our international construction cost

survey 2013 makes for interesting reading. Data gathered

by our people around the world reects major projects

and programmes in every sector. Our team of construction

economists provides expert analysis and ensure the data

is as robust as possible, given the ever-shifting nature

of such information.

This report contains data from 23 countries, with Brazil,

Poland and Uganda appearing for the rst time. Clients

planning major programmes of work will nd this a useful

decision-making tool that helps them compare future

construction costs between countries and regions.

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 newapproach for construction, and one we believe will become

signicant (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 Ofcer

Foreword

Overview 1

Australia

Brazil

Canada

China

Germany

Hong Kong

India

Ireland

Japan

Malaysia

Netherlands

Oman

Poland

Qatar

Russia

SingaporeSouth Africa

South Korea

UAE

Uganda

UK

US

Vietnam

12

14

16

18

20

22

24

26

28

30

32

34

36

38

40

4244

46

48

50

52

54

56

Purchasing power parity 58


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The global outlook for construction

is the most positive we have seen

since the nancial crisis began in2008. Of the 23 markets included

in this survey, 13 expect to see moreprojects 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 thenancial crisis began. These are

now going out for tender.

The start of a global recovery

is a great time to build. First-moveradvantages include stabilisedconstruction costs, reduced schedule

risk and the delivery of projects as

demand is increasing. In many regionstender prices are becoming more

competitive and there are plenty

of rms keen to bid.

Of course, some developers will prefer

to watch and wait before makingtheir move. In the rst fragile stages

of recovery, world events can erode

market condence overnight, and

there are likely to be headwindsstill to come.

Stable costs are the trend, butthere are exceptions. In emerging

economies including China, India,

Malaysia, Russia and South Africa, construction costs are expected torise steadily. And in certain hotspots

Brazil and Qatar, both future WorldCup hosts costs are also forecast

to increase strongly.

With recoverycomes opportunityThe economic tide has turned and there is reason to be

optimistic. Construction markets around the world are

showing the rst 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.

Figure 1. More projects in the next 12 months

for over half the markets surveyed

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

12 months. Of the 23 markets surveyed, 13 expect more projects to start, with four

predicting no change and six expecting fewer projects.

Cooler

Fewer projectsthan last 12 months

China

India

Netherlands

PolandSouth Africa

South Korea

Staying the same

Similar number ofprojects to the last12 months

Australia

Hong Kong

Ireland

Vietnam

WarmerMore projects startingthan last 12 months

Brazil Russia

Canada Singapore

Germany UAE

Japan UgandaMalaysia UK

Oman US

Qatar

International construction cost survey 2013 1


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the cost increaseof building ofcesin India

+25%

Purchasingpower paritymethodology allowsa true comparisonbetween countries

We can see some of these trends

emerging through our cost index

benchmarking of high-rise apartmentsand ofces in central business districts

(see Figures 2 and 3). So, for example,

while costs for ofces in the UK have

risen just four percent between 2010

and 2013, comparable costs in Indiahave risen 25 percent.

Over the following pages, we present

the ndings of our 2013 international

construction cost survey. The datacomes from current construction

programmes, and reects prices at

the middle of 2013. All costs exclude

VAT and applicable sales taxes.

Purchasing power parity:

a new way to compare markets

For those who want to drill downfurther 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 12 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 varyingcurrency exchange rates. The higher

the purchasing power parity adjusted

cost, the higher the relative costsof building in one country over

another. Though purchasing powerparity indexes are used in somebranches of economics, this method

has rarely been used to compareconstruction costs.

For example, we can see that an ofce

building in a business park in Japan

would cost 24 percent more to buildthan one in the UK; 3,339 purchasingpower parity units per m2for Japancompared to 2,690 units for the UK.Purchasing power parity indicates

the cost relative to the cost of living,so we can see that concrete in China

at 129 is almost half that of India

at 283.

Turner & Townsend worked with Bond

Universitys Centre for Comparative

Construction Research in Queensland,

Australia, to create this construction-

specic index, which we will be

employing and developing over thecoming years. You can read moreabout purchasing power parity on

page 58.

A business park in Japanwould cost 24 percentmore to build than one

in the UK.

2 Turner & Townsend


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Figure 2. Changes to the cost of central business

district ofces since 2010

Figure 3. Changes to the cost of high-rise

apartments since 2010

Mid-year 2010 2011 2012 2013

Australia 100 102 101 101

Brazil 100 104 108 112

Canada 100 102 103 104

China 100 107 112 118

Germany 100 102 104 106

Hong Kong 100 104 109 115

India 100 108 117 125

Ireland 100 101 100 101

Japan 100 100 100 101

Malaysia 100 105 109 113

Netherlands 100 102 103 105

Oman 100 101 103 105

Poland 100 101 103 105

Qatar 100 100 103 108

Russia 100 104 109 115

Singapore 100 103 105 109

South Africa 100 105 112 120

South Korea 100 102 104 106

UAE 100 100 102 104

Uganda 100 104 108 114

UK 100 102 101 103US 100 100 102 106

Vietnam 100 108 116 124

Mid-year 2010 2011 2012 2013

Australia 100 102 103 105

Brazil 100 104 109 114

Canada 100 102 104 106

China 100 107 113 120

Germany 100 102 104 106

Hong Kong 100 104 109 115

India 100 108 117 125

Ireland 100 102 102 104

Japan 100 100 100 101

Malaysia 100 104 109 113

Netherlands 100 102 104 106

Oman 100 101 103 105

Poland 100 102 104 106

Qatar 100 102 106 111

Russia 100 104 110 116

Singapore 100 104 108 112

South Africa 100 106 114 124

South Korea 100 102 104 106

UAE 100 100 102 105

Uganda 100 105 110 116

UK 100 102 102 104US 100 100 103 107

Vietnam 100 110 119 128

Looking at cost changes for prime property in the residential

and commercial sectors helps us to identify trends and make

predictions for the future. The two charts show construction

costs indexed to 2010 = 100 for high-rise apartments and

central business district ofces, for each region of the

survey based on cost per square metre.

We can see that for most countries, there has been a gradual

rise in costs for both types of building. There are exceptions:

costs have remained more-or-less stable in Australia, Ireland,

Japan and the UK; whereas in China, India, South Africa and

Vietnam, costs have risen more steeply.



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US recovery still fragile

In the past 12 months, the US

economy has begun to pick up,with the impact felt around the

world. Quantitative easing andlow interest rates adopted by theUSs central bank, the Fed, have

contributed to this edgling recovery.

However, there is uncertaintysurrounding the Feds ability to taperthis policy, which could lead to further

problems when it is reduced and,ultimately, stopped.

Suggestions from the Fed in May

this year that it might cut back on

its bond-buying programme overthe coming months had an immediate

and negative effect on global stockmarkets. Investors ditched riskyassets in favour of certainty.

Condence returned after further

assurances from the Fed, butcontinued pressures remain.

Standard & Poors (S&P) 500, which

tracks publicly traded US companies,has recently reached all-time highs

and global funds are moving back

into US dollars as the currencystarts to stabilise. Other markets have

followed the US, only pausing in May2013 as the northern economies tooksummer holidays.

Unemployment in the US is edgingdownwards, and housing construction

is increasing again. The Case-Shiller

20-City-Index, which measures the

value of residential real estate in20 metropolitan areas of the US,

shows a house price growth of 12percent over the past 12 months.

The USs newest industry and source

of energy, shale gas, is also injecting

further growth into the economy.Projects to construct the pipelines andassociated infrastructure are ramping

up, with the prospect of US energyself-sufciency promising a big boost

to the economy.

Falling unemployment and recovering

house prices will encourage USconsumers to spend more, providinga much-needed boost to international

trade and construction. Still, the USrecovery remains fragile, operating

within the connes of a quantitative

easing headwind and continuedgovernment impasses.

Policy changes in Europe?

In contrast to the tactics of theUSs central bank, European

countries have chosen the path

of austerity. However, recent policyannouncements indicate a change

of approach. Expect investment in

infrastructure, which should helprelieve the chronic underemployment

holding several major European

countries back.

Though some European countries,

such as Greece, Portugal and

Spain, continue to suffer fromunderemployment, many parts

of Europe are showing signs

of recovery. Here, forecastsof GDP growth over the nextyear are improving prospects

for construction.

The Middle East is also increasing

its construction activity, reawakening

many of the ambitious projectsthat have been dormant or partiallycompleted since the global nancial

crisis. Some USD1.3tn worth of

construction projects are in the

planning or tendering stages acrossthe region.

Projects such as high-speed rail,

manufacturing plants, heavyindustrial plants, football stadiums,

and housing and cultural precinctsare moving to construction or alreadyunderway. Traditionally, strong

markets such as Dubai are graduallycoming back to full strength andnew construction leaders such

as Qatar are emerging, with bigproject portfolios.

There are other engines of globalgrowth. Japan is making substantial

efforts to stimulate its economy afterdecades of stagnation by pumpingin money, causing the yen to fall

dramatically. The worlds third biggesteconomy is becoming competitive

again, construction is picking up andtrade skills shortages are becominga problem.

US house pricegrowth over thelast 12 months

+12%of Middle Eastconstruction projectsare in the planningor tendering stages

$1.3tn

4 Turner & Townsend


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Unemploymentin the US is edgingdownwards, andhousing constructionis increasing again



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All change in China

For the past ve years, Chinas growth

has kept the global economy growing

at above three percent, through itsdemand for commodities. Its appetitefor iron ore, copper, coal and oil during

that period drove up commodityprices and spurred a wave of mining

investment. Chinas manufactureand export of cheap goods has alsokept global ination down to below

two percent.

This changed in late 2012, following

concerns about the sustainability

of Chinese growth as their new

political leadership established itself.

Indications show that China has

now entered a new lower-growth

trajectory, although with growth

forecast at seven to eight percent,

it will continue to be an importantdriver of global growth.

Changes in China are felt elsewhere

in the world. Lower commodity priceshave caused the sudden cancellation

of numerous natural resource projects

worldwide, leading to concern in theeconomies of Australia and LatinAmerica, where mining plays

a major role.

6 Turner & Townsend


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China has now entereda new lower-growthtrajectory, although with

growth forecast at sevento eight percent, it willcontinue to be an importantdriver of global growth.



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Competitive tenders

Though construction marketsaround the world are warming

up, tender prices will not be followingsuit immediately. In two-thirdsof the markets surveyed, there

is strong competition on tenders,with others reporting moderate

competition.

In general, construction costs are

only increasing slowly, often in line

with a countrys general ination.

In many regions, costs have barely

moved for ve years. Flat prices go

all along the value chain: engineers,architects and construction

consultants costs are competitive,and skilled labour is fairly easyto obtain in most markets.

Margins

Contractors margins in developed

economies have been hard hit by

the global nancial crisis. Fierce

tender competition has forcedmany contractors to tender with

very low margins, hoping to pickup additional margin during theconstruction by completing ahead

of schedule, through betterefciency, or negotiating

advantageous deals with

their suppliers.

It is interesting to note that

countries in parts of Africa,Asia, the Middle East and Russia

have indicated higher contractors

margins. A more vibrant constructionmarket allows margins to increasethrough reduced tender competition.

Barriers to entry in some markets

may also limit the number of tendersand help keep margins higher

(see Figure 5).

Preliminaries

Ranging from eight percent

to 15 percent, the spread in the

range of preliminaries costs such

as supervision, project set-up,

scaffolding, and temporary facilities indicates different requirements

between countries. Higher-cost

countries may have higherinclusions, due to elements such

as specications for scaffolding

(based on local safety standards)

and insurance costs (see Figure 6).

Countries or regions where space

restrictions are common, with

awkward building sites, wouldtypically have higher preliminaries.For example, the preliminaries for

a building in New York City might

be expected to be higher thanfor the rest of the US.

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.

Intense competition, notmuch work, prices low:

IrelandNetherlands

South Korea

Strong competition,moderate tender prices:

Australia

Canada

China

Germany

Malaysia

OmanSingapore

South Africa

UAE

Uganda

UK

US

Vietnam

Moderate competition,moderate tender prices:

Brazil

Hong Kong

India

Japan

Poland

Russia

Qatar

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

8 Turner & Townsend


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This chart shows what percentage of a buildings cost a

contractor would typically make as prot on an ofce building

with a gross oor area of 5,000m2. Generally, where work

volumes are lower, margins are squeezed as contractors

lower their tender prices in order to win work.

At the lower end of the range, contractors in Canada, Ireland,

South Korea, Australia, US and UK all currently make less than

ve percent margin. Whereas in South Africa, Uganda, Qatar

and India, margins are relatively high: above ten percent.

This chart shows what proportion of a buildings cost goes on

preliminaries for an ofce with a gross oor area of 5,000m2.

Preliminaries include costs such as scaffolding, approvals,

insurances, power and water, cleaning and handover,

and work supervision.

Typically, higher-cost countries have higher preliminaries.

Regulatory compliance, such as safety and environmental

requirements, adds further preliminary costs.

Figure 5. Wide range of contractors margins tells story of the markets

Figure 6. Difference in preliminaries, depending on projects location

0 2 4 6 8 10 12 14 16 18 20India

Qatar

Uganda

South Africa

Russia

Brazil

Malaysia

Oman

UAE

Singapore

Japan

China

Poland

Hong Kong

Germany

Netherlands

Vietnam

UK

US

Australia

South Korea

Ireland

Canada

Percentage

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

Germ

any

Japan

Hong

Kong

Poland

Netherlands

UK

Australia

SouthKo

rea

UAE

Qatar

SouthAfrica

Brazil

Ireland

Singapore

Malaysia

Oman

Vietnam

USIndia

Canada

China

Russia

Uganda

Percentage



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A stable outlook for costs

Materials prices are competitive,and are expected to increase only

slowly for several years. In 201112,high prices for commodities fed intocost hikes for construction products

such as steel, copper cables andcopper pipes. In late 2012, however,

those commodity prices startedto fall. Rises in manufacturing wagesand energy will cause only a gradualprice rise over the next few years.

The cost of manufacturing plants

and equipment is also relatively

stable. European manufacturers

who were hit hard after the global

nancial crisis are likely to have

spare plant and labour capacityfor several years.

Construction wages and salaries

in advanced economies have changed

little since the nancial crisis and are

expected to remain relatively stable.

In contrast, those in China, India,

South Africa and Vietnam will continueto increase strongly, but from a low

base (Figure 7 shows relative labour

costs between markets).

Looking ahead, we forecast modest

rises in construction costs over thecoming 12 months in many markets.Australia, Ireland, the Netherlands,

Poland, Oman and the UAE should

all experience just two percent cost

escalation between mid-2013 and mid-

2014, removing that element of riskfrom projects. At the other end of the

scale, Brazil, Hong Kong, India, Qatar

and South Africa could all experiencecost escalation of six percent or more,with South Africa predicting the

highest escalation, at ten percent(see Figure 8).

cost escalationover the coming12 months inmany markets

+2%

10 Turner & Townsend


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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).

We asked our experts to predict how much construction costswould rise between mid-2013 and mid-2014. As can be seen from

the chart, we expect a great variation in cost escalation, with

costs in some markets remaining almost at, while others are

rising quickly.

Developers in Ireland, Netherlands, US, Australia, UAE, Omanand Poland will be taking on little risk of cost escalation, with

only two percent predicted. Whereas in countries such as South

Africa, India, Brazil and Hong Kong, rising construction costs

must be an important consideration.

Figure 7. The cost of labour

Figure 8. How much will costs rise over the next 12 months?

Germany

Australia

US

Netherlands

UK

Canada

BrazilQatar

India

Poland

Singapore

SouthKorea

HongKong

Russia

Vietnam

Oman

SouthAfrica

Uganda

UAE

Malaysia

Ireland

Japan

China

0 1 2 3 4 5 6 7 8 9 10

Poland

Oman

UAE

Australia

US

Netherlands

Ireland

South Korea

Malaysia

SingaporeCanada

UK

Germany

Qatar

Uganda

Russia

Vietnam

China

Japan

Hong Kong

Brazil

India

South Africa

Percentage



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Australia

The Australian economy continued to grow during

the period following the global nancial crisis, through

a massive investment in mining and energy projects.

Now that this investment is tailing off, where will thenext 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 Australiandollar, which plagued the export sector, is now devaluing,offering better opportunities for tourism, attracting

overseas students and services exports.

Meanwhile, domestic non-resources construction

has been hit by low demand, weak condence and

a shortage of projects. This has kept margins low

and tendering very competitive.

International building costsper m2of internal area, in 2013

AUD USD(exchange rate:

1.10)

Purchasingpower parity

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

Ofces business park 1,860 1,691 1,860

CBD ofces up to 20 oors medium (A-grade) 2,940 2,673 2,940

CBD ofces 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 950High-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

Residential recovery and falling exchange rate to drive growth


15/62International construction cost survey 2013 13

Australia international building costsper m2of internal area

AUD USD(exchange rate:

1.10)


CompositeExcavate basement (m3) (1,800m3job) 22 20 22

Excavate footings (m) 36 33 36

Concrete in slab (m3) (1,500m3job) 261 237 261

Reinforcement in beams (tonne) 2,076 1,887 2,076

Formwork to soft 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) (1,000m2job) 620 564 620

Plasterboard 13mm thick to stud wall (m2) (3,000m2job) 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) (1,000m2job) 110 100 110

Vinyl ooring to wet areas (m2) (500m2job) 52 47 52

Carpet medium tufted (m2) (4,500m2job) 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) (5,000m2job) 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) (1,500m3job) 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

Tendering: lukewarm

Cost escalation: 2%Contractors margin: 4%

Preliminaries: 12%

Adelaide 95

Brisbane 98

Melbourne 98Perth 96

Sydney 100



Brazil

Brazils continued growth and ambitious construction

plans for the 2014 World Cup and 2016 Olympics will

add pressure to construction costs, especially in the

venue cities. Skills and equipment shortages are likelyin these areas. However, Brazil is a large country witha large population, and the additional constructiondemand should be within its capabilities.

Over the next ve years, construction spending in the

country is expected to increase at a seven percentcompound 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.

While non-residential construction spending growth

is likely to slow down after the build-up to the World Cup

and Olympics, spending on residential construction and

countrywide infrastructure is expected to acceleratebeyond 2016 to 2022.


Real USD(exchange rate: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

IndustrialWarehouse/factory units basic 1,520 667 864

Large warehouse distribution centre 1,960 860 1,114

High-tech factory/laboratory 4,060 1,781 2,307

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




Public spending will maintain growth well beyond the World Cup and Olympics



Brazil international building costsper m2of internal area

Real USD(exchange rate:

2.28)










Curtain wall glazing incl support system (m2) (1,000m2job) 2,500 1,096 1,420


Single solid core door incl frame and hardware (50 door job) 4,200 1,842 2,386


Ceramic tiling (m2) (1,000m2job) 80 35 45







Labour





Site foreman 80 35 45

Material



Concrete block (400x200) per 1,000 (>10,000 block job) 1,500 658 852









Plant


Market: getting warmer

Tendering: warm

Cost escalation: 7%

Contractors margin: 9%

Preliminaries: 11%

Belo Horizonte 87

Brasilia 94

Prto Alegre 81

Rio de Janeiro 101

So Paulo 100



Canada

The Canadian economy has been one of the strongest

global performers among advanced economies in

recent years. Unemployment is down to 7.2 percent and

a strong resources sector is helping to boost exports andengineering construction. However, growth of 1.7 percent

in the second quarter of 2013 disappointed policymakers,

who were hoping for 2.5 percent.

Construction in most sectors tailed off in late 2012. But by

mid-2013 all sectors, including housing, commercial andindustrial, were picking up again, along with construction

employment, which is now showing moderate growth.

The overvalued Canadian dollar has eased down

ve percent against the US dollar in 2013. This will

shore up Canadas competitive position and

export earnings.

Construction cost increases will be moderate,

with tendering competitive and only small wageincreases. The relatively weak domestic private

sector should improve over 2013 and 2014.


CAD USD(exchange rate:

1.03)


AirportsDomestic terminal full service 5,750 5,583 5,301


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




All sectors picking up, with tenders still competitive



Canada international building costsper m2of internal area

CAD USD(exchange rate:

1.03)














Ceramic tiling (m2) (1,000m2job) 86 83 79Vinyl ooring to wet areas (m2) (500m2job) 66 64 61






Labour





Site foreman 76 74 70Material












Plant



Tendering: lukewarm

Cost escalation: 3%


Preliminaries: 8%

Calgary 113

Edmonton 111

Halifax 95

Montreal 95

Ottawa 103Toronto 100

Vancouver 95



China

Chinese growth has now settled at a more moderate

level of seven to eight percent, following several years

of very strong growth. The Chinese economy is still

investment led, despite efforts to stimulate domesticconsumption and grow the Chinese middle class.

Once again, housing and apartment constructionis in danger of overheating, although various government

efforts to slow this sector may prove successful fora while. Efforts are being made to encourage more

foreign investment, such as healthcare provision.

Construction in the commercial and retail sectors

is buoyant, but industrial spending appears to beslowing, especially in the more developed southern

and eastern cities.

Though the Chinese market is cooler, tender prices

are still expected to increase, albeit at a lower rate thanin previous years. Labour costs, while still a relatively

low portion of total construction costs, are still growingand are likely to have more of an impact on tender pricesin the future.


CNY USD(exchange rate:

6.13)


Airports



Carparks

Multistorey above ground 2,140 349 644


Commercial

Ofces business park 4,690 765 1,412



Education


University 5,390 879 1,623

HospitalsDay 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

Warehouse/factory units basic 2,580 421 777

Large warehouse distribution centre 3,050 498 918

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

Construction market cools as growth rate slows



China international building costsper m2of internal area

CNY USD(exchange rate:

6.13)





Reinforcement in beams (tonne) 5,200 848 1,566





Curtain wall glazing incl support system (m2) (1,000m2job) 1,600 261 482


Single solid core door incl frame and hardware (50 door job) 2,670 436 804








Labour







Reinforcement bar 16mm (tonne) (120 tonne job) 4,500 734 1,355










Plant

Hire 50t mobile crane + operator (day) 2,100 343 632

Market: getting cooler

Tendering: lukewarm

Cost escalation: 5%


Preliminaries: 8%

Beijing 97

Chongqing 100

Guangzhou 92

Shanghai 100

Shenzhen 105



Germany

Germany achieved a region-leading growth rate of

0.9 percent in the second quarter of 2013 compared

to the same period in 2012. Business condence is now

at its highest level in 16 months, indicating the improvingprospects of the region.

Housebuilding is beneting from low interest rates,

improving demand and a growing preference to hold

physical assets rather than shares. German industryis doing well, with orders continuing to increase. This alsoholds for the building, civil engineering and underground

construction sectors which have grown by nearly tenpercent over the last year.

Some of the major infrastructure projects which added

to this growth rate, such as the Berlin airport and theFrankfurt airport expansion, are, however, coming to

an end. The outlook for commercial and infrastructureconstruction for the immediate future is slightly weaker.

As a consequence, construction cost escalation is mild.

But as the economies of Germanys European neighbours

improve over 201416, German construction activityis set to increase further.


EUR USD(exchange rate:

0.76)


Airports



Carparks


Multistorey below ground 760 1,000 1,137

Commercial




Education

Primary and secondary schools 1,540 2,026 2,303University 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 1,122High-tech factory/laboratory 1,750 2,303 2,617

Residential




Apartments private medium density 950 1,250 1,421



Retail




Solid growth which looks set to continue



Germany international building costsper m2of internal area


0.76)












Single solid core door incl frame and hardware (50 door job) 865 1,138 1,294








Labour







Reinforcement bar 16mm (tonne) (120 tonne job) 823 1,083 1,231


Standard brick per 1,000 673 885 1,006








Plant



Tendering: lukewarm

Cost escalation: 3%


Preliminaries: 15%

Berlin 90

Frankfurt 95

Munich 100

Stuttgart 96

There was an average German escalation of two percent during 210213. Some costs/rates are signicantly higher than previous

editions following an exercise to align specications and inclusions with regional peers.



Hong Kong

Hong Kongs construction industry is experiencing

strong growth, with several sectors booming again.

The civil construction sector is by far the largest growthdriver, with ve large rail projects underway or scheduled

to commence soon. Besides these high-prole rail projects,

an Environmental Impact Statement for an USD11.1bn

third runway at the citys airport is now underway.

Due to these projects and incessant demand for

commercial and residential real estate in the denselypopulated city, construction volumes are at a high level.

Construction materials costs are rising relatively slowly,

with the exception of key civil materials, such as concreteand rebar. Labour costs, however, suffer from high cost

escalation due to increasing labour shortages andan ageing workforce.

In the short term, construction cost escalation willremain comparatively moderate. However, from the

second quarter of 2014 costs are forecast to increase

strongly again.


HKD USD(exchange rate:

7.75)


Airports



Carparks

Multistorey above ground 10,000 1,290 1,754


Commercial




Education


University 24,000 3,097 4,211Hospitals




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




Booming civil sector will push prices up in 2014



Hong Kong international building costsper m2of internal area

HKD USD(exchange rate:

7.75)




Concrete in slab (m3) (1,500m3job) 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









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


Tendering: warm

Cost escalation: 6%


Preliminaries: 15%



India

At ve percent year-on-year, growth in the Indian

economy in 201213 has been the slowest the countryhas seen in the past decade.

Rising interest costs and fewer government and private

projects have affected the construction sector. Contractors

also complain about excessive bureaucracy causing slower

project approvals and increased nancial risks.

Despite the short-term weakness, the outlook for thesector remains positive in the longer term. The upsideof the weakening exchange rate will be improved export

earnings, providing much-needed capital for investment.

Recently announced government programmes include

easing of foreign direct investment rules in the multi-brandretail and aviation sectors and increased investment plans

for metro rail projects in 19 cities, motorways and roads.

Ination and construction cost escalation remain quite

high. The weakened exchange rate will add to costs

of imported equipment, machinery, fuel and materials.


INR USD(exchange rate:

58.00)


Airports


Low-cost carrier basic service 49,600 855 2,543

Carparks

Multistorey above ground 27,360 472 1,403


Commercial


CBD ofces up to 20 oors medium (A-grade) 39,900 688 2,046

CBD ofces high-rise prestige 43,320 747 2,221

Education

Primary and secondary schools 20,520 354 1,052University 43,320 747 2,221

Hospitals

Day centre (including basic surgeries) 23,940 413 1,227

Regional hospital 42,180 727 2,163

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

Large warehouse distribution centre 37,190 641 1,907High-tech factory/laboratory 44,400 766 2,277

Residential

Individual detached house medium standard 34,200 590 1,754





Aged care/affordable units 20,520 354 1,052

Retail

Large shopping centre including mall 43,320 747 2,221

Neighbourhood incl supermarket 29,640 511 1,520

Prestige car showroom 19,950 344 1,023

Slow now, but long-term prospects look good



India international building costsper m2of internal area

INR USD(exchange rate:

58.00)







Blockwork in wall (m2) (10,000 block job) 1,300 22 67




Plasterboard 13mm thick to stud wall (m2) (3,000m2job) 4,000 69 205



Ceramic tiling (m2) (1,000m2job) 3,146 54 161Vinyl ooring to wet areas (m2) (500m2job) 2,360 41 121

Carpet medium tufted (m2) (4,500m2job) 2,462 42 126

Lighting installation (m2) (5,000m2+ job) 2,300 40 118




Labour






Concrete 30 MPa (m3) (1,500m3job) 5,525 95 283


Concrete block (400x200) per 1,000 (>10,000 block job) 36,750 634 1,884

Standard brick per 1,000 6,647 115 341

Structural steel beams (tonne) (100 tonne + job) 56,000 966 2,871







Plant

Hire 50t mobile crane + operator (day) 16,020 276 821


Tendering: warm

Cost escalation: 7%


Preliminaries: 9%

Bangalore 104

Chennai 96

Kolkata 96

Mumbai 100

New Delhi 97



Ireland

The Irish construction sector has shrunk considerably

since 2006, with 34 percent fewer rms in 2013

compared to then. Skills and expertise have been lost,

with professionals and tradespeople moving to workoverseas. At the height of Irelands construction boom,

273,000 people were directly employed in the sector,

a gure that had shrunk to 99,600 in 2012.

GDP growth remains below one percent in 2013 as Irelandfaces weaker demand from Europe and the UK. Domestic

demand is hampered by continued austerity measures

aimed at correcting scal imbalance; its effects include

a lack of development nance, weak condence and

low demand.

Some projects are coming through in the public sector,

thanks to the governments school-building programme,its purchasing power parity stimulus package, and

spending on maintenance and energy-efciency measuresfor schools, roads and local authority housing. Despite this,construction opportunities overall are down.

Tender prices are competitive and high levels of

unemployment in construction will keep constructioncost increases to a minimum for several years. Gradually,

as the European and US economies improve over 201415,

Ireland will benet through improved demand and the

relaxation of austerity measures.

Data for Northern Ireland is included in UK gures

on pages 5253.



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







RetailLarge shopping centre including mall 2,250 2,961 4,354



Low demand and high competition are keeping prices down



Ireland international building costsper m2of internal area


0.76)





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







Reinforcement bar 16mm (tonne) (120 tonne job) 750 986 1,451










Plant



Tendering: cold

Cost escalation: 2%


Preliminaries: 10%



Japan

Are the years of stagnation for the Japanese economy

coming to an end? The signs look positive.

Business conditions are recovering, with the sharemarket rising 42 percent between January and the

end of September 2013. GDP growth is positive againas Abenomics, the policies of Prime Minister Shinz Abe,

take effect. These include further monetary easing,

tax breaks and a weaker currency, which will stimulateJapanese 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 addedto construction activity.

The news in September 2013 that Tokyo will host the 2020

Olympics is also positive for the construction sector, withinvestment in stadiums, housing and transport expected.

Reports of sporadic skills shortages in key construction

trades means that cost escalation is presently a littlehigher than in other developed economies.


JPY USD(exchange rate: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

IndustrialWarehouse/factory units basic 154,500 1,578 2,238

Large warehouse distribution centre 207,900 2,124 3,011


Residential







Retail

Large shopping centre including mall 304,000 3,105 4,403Neighbourhood incl supermarket 368,400 3,763 5,336


Abenomics helps Japan to rise again



Japan international building costsper m2of internal area

JPY USD(exchange rate:

97.90)





Reinforcement in beams (tonne) 97,000 991 1,405

Formwork to soft of slab (m2) 2,680 27 39

Blockwork in wall (m2) (10,000 block job) 4,410 45 64



Curtain wall glazing incl support system (m2) (1,000m2job) 100,000 1,021 1,448

Plasterboard 13mm thick to stud wall (m2) (3,000m2job) 3,050 31 44



Ceramic tiling (m2) (1,000m2job) 5,820 59 84Vinyl ooring to wet areas (m2) (500m2job) 3,380 35 49

Carpet medium tufted (m2) (4,500m2job) 4,300 44 62

Lighting installation (m2) (5,000m2+ job) 4,500 46 65

Copper pipe 15mm to wall (m) (1,000m+ job) 2,290 23 33

Fire sprinklers (per m2) (5,000m2job) 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 35Material

Concrete 30 MPa (m3) (1,500m3job) 11,900 122 172

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



Tendering: warm

Cost escalation: 5%


Preliminaries: 15%



Malaysia

Malaysia is making fresh progress towards its goal of

achieving developed nation status by 2020. And a major

part of its strategy is an ambitious construction plan.

The Economic Transformation Programme (ETP) includes

USD52bn of new rail and road projects. Among these

projects are new light rail transit extensions, mass rapid

transit systems and a high-speed railway between Kuala

Lumpur and Singapore.

The government is also planning large public housing

schemes. Rolled out progressively between now and2020, these developments will provide a boost to the

construction sector.

For now, Malaysia remains a low-cost countryfor construction. Shortages of skilled labour are,however, likely to increase costs in the future.


MYR USD(exchange rate:

3.23)


Airports



CarparksMultistorey above ground 1,500 464 994


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

Individual detached house medium standard 2,340 724 1,551Individual detached house prestige 2,990 926 1,982




Aged care/affordable units 1,950 604 1,292

Retail




Road, rail and major housing projects will drive costs up from low base



Malaysia international building costsper m2of internal area

MYR USD(exchange rate:

3.23)












Single solid core door incl frame and hardware (50 door job) 836 259 554








Labour

















Plant

Hire 50t mobile crane + operator (day) 1,800 557 1,193


Tendering: lukewarm

Cost escalation: 3%


Preliminaries: 10%

Georgetown 97

Ipoh 97

Johor Bahru 88

Kuala Lumpur 100

Kuching 112



Netherlands

Despite being the fth biggest economy in the

eurozone and its third largest exporter, GDP growth

in the Netherlands fell during 2013. New housing projects

are decreasing and business condence remains rmlyin negative territory.

The forecast for 2014 economic growth was cut by another

quarter of a percentage point to 0.5 percent recently.

This reects the 6bn in austerity measures needed

to bring Dutch public nances close to eurozone targets.

These measures, combined with weaker export demand,

mean unemployment has risen by nearly two percent sinceJuly 2012, to 8.7 percent.

Purchasing power parity projects are currently

one of the more buoyant construction sectors.But overall, infrastructure growth is down and

private sector construction is subdued.

Tenders are very competitive. Cost escalation

is low, but low-value submissions are addingto commercial risk.



0.76)


Airports



Carparks



Commercial




Education

Primary and secondary schools 1,600 2,105 2,667University 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

Large warehouse distribution centre 860 1,132 1,434High-tech factory/laboratory 1,150 1,513 1,917

Residential







Retail




Projects thin on the ground beware of low bids



Netherlands international building costsper m2of internal area


0.76)










Curtain wall glazing incl support system (m2) (1,000m2job) 632 831 1,053



Painting to walls primer + 2 coats (m2

) 17 22 28Ceramic tiling (m2) (1,000m2job) 75 99 125







Labour




General labourer 23 30 38Site foreman 39 52 65

Material


Reinforcement bar 16mm (tonne) (120 tonne job) 968 1,274 1,614










Plant



Tendering: cold

Cost escalation: 2%


Preliminaries: 13%

Amsterdam 103

Rotterdam 98

The Hague 100



Oman

The Sultanate of Oman was insulated for the most

part from the negative effects of the global nancial

crisis, thanks to increased oil revenue. The government,

in its eighth ve-year Development Plan (201115),announced over OMR5.6bn of state spending on education,

healthcare, defence, transport infrastructure, and oil and

gas eld development.

While private investment lags behind, groundwork is beingestablished for secure future investment, as Oman remainsone of the most politically and economically stable of the

GCC countries. Major projects include the Muscat

International Airport and Salalah Airport, projected to

complete in 2015, and the development of international

ports at Duqm, Muscat, Salalah and Sohar.

As the country continues to develop its infrastructure and

industry to move away from its historic reliance on oil andgas production, a broad increase in construction activityis expected over the immediate future.


OMR USD(exchange rate:

0.38)


Airports


Low-cost carrier basic service 950 2,500 5,061

Carparks

Multistorey above ground 360 947 1,918


Commercial

Ofces business park 410 1,079 2,184

CBD ofces up to 20 oors medium (A-grade) 510 1,342 2,717

CBD ofces high-rise prestige 690 1,816 3,676

Education

Primary and secondary schools 590 1,553 3,143

University 670 1,763 3,569Hospitals

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

Warehouse/factory units basic 440 1,158 2,344

Large warehouse distribution centre 410 1,079 2,184

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

Construction activity increasing, with major projects planned


37/62



Poland

During 2013, the Polish construction market has slowed.

This follows several years of strong growth, in line with thecountrys GDP growth rates, which have been among the

highest in the EEC countries.

The market for apartments appears to be temporarilyoversupplied, and activity in the civil engineering sectorsof roads, water and energy is also slowing. Bankruptcies

among construction rms increased during 201213

as the market attened out.

Unemployment in Poland has been rising since late

2008, and grew from 9.9 percent in January 2012 to

10.7 percent in March 2013. Ination is well under control,

and construction costs are expected to grow very littleover the next 12 months, with a predicted cost escalationof just two percent.

By 2014, the sector is likely to start picking up in line

with improving European growth. EU funding of 72.9bn

between 2014 and 2020 a third of which is aimedat infrastructure and the environment is likely to give

the Polish construction market a further boost.


PLN USD(exchange rate:

3.17)


Airports



Carparks

Multistorey above ground 1,700 536 1,463


Commercial




Education


University 3,500 1,104 3,012Hospitals




Hotels


5 star luxury 6,500 2,050 5,594

Resort style 4,500 1,420 3,873

Industrial



High-tech factory/laboratory 2,500 789

International Construction Cost Survey 2013

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