A new survey from professional services company Turner & Townsend has revealed London is the world’s fifth most expensive city for construction, despite the slump of the pound.
Research revealed London is the fifth most expensive city for construction in the world. The company studied 43 regions and cities in its annual report and placed the capital in fifth place, down from last year when it was in third place.
The news is perhaps surprising, given the decline in the value of the pound since Brexit. However, London is only overtaken by New York, San Francisco, Zurich, and Hong Kong when it comes to commercial and residential construction.
According to Turner & Townsend’s survey, construction in London totals $3,214 per m2. Demand for infrastructure work and labour shortages are set to push this figure up by a further 4.1 per cent in 2017.
Compared to New York, which topped the chart, came in at $3,807 per m2. In second place, San Francisco’s construction costs hit just over $3,549 this year, while Zurich and Hong Kong reached $3,527.87 and $3,487.82 per m2, respectively.
Furthermore, the growing skills shortage had pushed the global cost of construction inflation to 3.7 per cent in 2016. This was an increase from 2.9 per cent seen in 2015. The skills shortage remains a global issue, not just a UK one, with only four cities (Muscat, Perth, Santiago and Sao Paulo) reporting a surplus of workers.
Steve McGuckin, global managing director for real estate said: “It is clear that construction is not doing nearly enough to tackle this issue, which if not addressed has the potential to become a crisis.”