- San Francisco, New York City, Boston and Los Angeles are among the most expensive cities in the world, according to data Turner & Townsend’s international DIY store survey 2021.
- More than 30% of respondents forecast a year to two year recovery for the construction industry to return to pre-pandemic production levels.
- Rising construction costs, interruptions in the supply chain and a shortage of skilled workers remain the main obstacles to industry growth, according to the study.
Tokyo is considered that most expensive construction city in the world, powered by the extensive pipeline of real estate and infrastructure projects, which the report says is increasing the demand for construction resources. Hong Kong, San Francisco and New York follow Tokyo. Boston and Los Angeles rank seventh and ninth, respectively, as both markets generally have high labor costs to build.
North America has the highest average for construction wages, with New York and San Francisco average hourly wages being $ 109.90 and $ 104.90, respectively, according to the survey.
Turner & Townsend’s results were similar to a recently published one Arcadis construction cost index, Which New York City and San Francisco as the seventh and eighth cities with the highest construction costs in the world. Arcadis produced the report during the second wave of the COVID-19 pandemic. No other US cities are in the top 10, according to Arcadis.
Here is the full list of the top 10 most expensive cities according to Turner and Townsend:
New York City
International border closings due to the pandemic mean imported labor was not available or has been significantly reduced. According to the study, this had a negative impact on the home improvement stores that are dependent on migrant workers.
More than a third of Turner & Townsend survey respondents said the pandemic had a major or significant impact on their supply chains. The prices for structural steel girders, rebar, softwood and copper pipes have increased by up to 40% year-over-year in some markets, according to the report.
Warm, lukewarm and even cold markets saw higher price inflation due to the pandemic, in part due to skills shortages and supply constraints, according to the report. Higher price inflation usually occurs in hot markets.
But also as Activity increases in sectors such as apartment buildings, These supply chain constraints and skilled labor shortages are becoming a major problem across the board, leading to significant construction cost inflation in many markets, the report said. For this reason, the economic recovery remains very inconsistent between countries, regions and industries.
According to the International Monetary Fund, the global economy contracted by 3.5% in 2020. However, activity in some hardware stores has increased so far in 2021.
The IMF forecasts global economic growth of 6% in 2021, led by India, China and the USA with growth of 12.5%, 8.4% and 6.4% respectively.