Saudi Arabia, Africa and developing Asia cheapest for construction

16 August 2011

Range of construction costs for selected countries, where 100 = cost per square metre in south-east

Range of construction costs for selected countries, where 100 = cost per square metre in south-east UK. SOURCE: EC Harris.

A new study by consultant EC Harris has shown that construction costs are among the lowest in the Saudi Arabia and in parts of Africa and developing Asia. In contrast, costs are highest in Europe, with Switzerland, Denmark and Sweden topping the list.

The study by EC Harris looks at construction costs in 56 countries around the world, providing an indicative cost range per m2 across a range of residential and non-residential building types. These are then indexed against a benchmark, where a score of 100 is equivalent to the cost per m2 in the south-east of the UK.

Based on this scale, the cost per m2 in Switzerland came in highest at 140 to 203, followed by Denmark at 119 to 172 and Sweden at 109 to 141. The cheaper countries in Europe as far as construction costs were concerned were Bulgaria (38 to 66), Macedonia (45 to 62) and Ukraine (45 to 65).

Construction costs in the Arabian Gulf were in line with those in Europe, around the 100-mark, although Saudi Arabia was notably cheap at 38 to 75. The five African countries surveyed - Algeria, Ghana, Morocco, South Africa and Tunisia also had low construction costs, ranging from 31 to 63.

In Asia, the cheapest countries included Taiwan (22 to 44), Sri Lanka (24 to 31) and India (24 to 33), while china was also at the lower end of the spectrum, scoring 37 to 52. The more expensive markets included Hong Kong, Singapore and South Korea, with japan topping the regional scores at 107 to 141.

Other markets surveyed included Australia (95 to 131), and the US (68 to 106).

Commenting on the figures, Simon Rawlinson, head of strategic research and insight at EC Harris said, "Higher commodity prices continue to present problems, particularly in low cost countries where they can make a big impact on construction prices. In contrast, continuing economic problems and weak demand in parts of Western Europe mean that the supply chain continues to absorb price rises. Slow recovery in the US means that construction prices have moved little since last year."

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