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6.0 METHODOLOGY
buildings of tomorrow vary widely major cities. Last year’s theme was
‘forewarned is forearmed’, where
commodity prices, and unexpected the case that access to reliable data
and insight, combined with effective
political developments have added control, was a key part of the toolkit
for successful delivery.
2.1 SUMMARY
growth, led by China and the There are some exceptions. Some
US cities, New York, San Francisco
resource economies, such as Brazil and Denver for example are seeing
high levels of activity and are likely
and Saudi Arabia, points to wider to see continuing competition for
contractors and construction labour.
changes affecting the world’s Amsterdam is also in the midst of a
mini building boom which has seen
construction markets. relatively high levels of inflation in
local markets. Simply by being one
of the largest and fastest growing
economies in the world, India is also
seeing some cost escalation, albeit
from a very low base. However,
across some markets, weaker
growth in demand and slow resource
markets have helped to eliminate
construction inflation from cities
including Dubai, Sinagpore and
Hong Kong.
Elsewhere, modest growth has
been the theme in many locations
in Europe and Asia where limited
changes in construction workload
have had correspondingly little
impact on local prices. Whether such
stability can be sustained through
2017 will be of crucial importance
to consultants, contractors and
other members of local construction
supply chains.
In this year’s rankings our assessment
is based on typical developments
in city locations, illustrating the
significant product quality, supply
chain and cost differential factors
specific to these locations, including
London, Geneva, New York and Hong
Kong. The findings also point to
significant cost differentials within
the Eurozone, with costs in Lisbon
and Athens still at an almost 50%
discount to Brussels, for example.
2.2
FIG. 1: RESULTS TABLE - INTERNATIONAL COST COMPARISON INDEX
NEW YORK ◄► 1
HONG KONG ▲ 2
GENEVA ▲ 3
CENTRAL LONDON ▼ 4
MACAU ◄ ► 5
COPENHAGEN ◄ ► 6
STOCKHOLM ◄ ► 7
FRANKFURT ◄► 8
PARIS ◄► 9
VIENNA ▲ 10
DOHA ▲ 11
BRUSSELS ▲ 12
AUCKLAND ▲ 13
MELBOURNE ▲ 14
SINGAPORE ▼ 15
MILAN ▼ 16
TOKYO ▲ 17
JEDDAH ▼ 18
DUBAI ▼ 19
AMSTERDAM ▲ 20
SEOUL ▼ 21
KIEV ◄ ► 22
MADRID ▲ 23
RIGA ▲ 24
ANKARA ▼ 25
ZAGREB ▲ 26
BRUNEI ▲ 27
LISBON ▲ 28
WARSAW ▲ 29
BELGRADE ▲ 30
SAO PAULO ▼ 31
ATHENS ▲ 32
SOFIA ▲ 33
SARAJEVO ▲ 34
SHANGHAI ▼ 35
PRAGUE ▲ 36
BUCHAREST ▲ 37
MANILA ▼ 38
BANGKOK ▲ 39
▲ HIGHER RANKING
TAIPEI ▲ 40 = MORE COSTLY TO CONSTRUCT
HO CHI MINH ▼ 41
◄ ► NON MOVER
JAKARTA ▼ 42
▼ ▼ LOWER RANKING
KUALA LUMPUR 43
= LESS COSTLY TO CONSTRUCT
BANGALURU ▼ 44
700
600
FORECAST
500
Index (Base 2005 = 100)
400
300
200
100
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Aluminum Crude oil, avg, spot Coal, Australian Copper Iron ore
*Please note that the huge rise and fall in iron ore prices between 2009 and 2015 distort the data.
3.2 CURRENCY US and Hong Kong. In the case of
London, the weakness of the pound
TRENDS is encouraging inward investment
The volatility of the currency market from dynamic countries including
has continued over the past year as Malaysia, China or India. Whether
prominent currencies have recovered these positive effects continue to be
against the US dollar. The big story felt in London could be influenced
has of course been the post-Brexit by measures adopted by the US to
fall of the value of the British pound, address what the new administration
which stands out for its speed, scale perceives as currency manipulation.
and impact. In a reversal of last
year’s strong performance, GBP FIG. 3: US DOLLAR MOVEMENT AGAINST GLOBAL CURRENCIES: OCTOBER 2015 - OCTOBER 2016 ¹
has lost around 15% against the
dollar since this time last year. It AUSTRALIAN DOLLAR
was the world’s worst performing CHINESE YUAN
currency during 2016. Further CZECH KORUNA
DANISH KRONE
uncertainty surrounding Brexit EURO
negotiations following the triggering HONG KONG DOLLAR
INDIAN RUPEE
of Article 50 could maintain the INDONESIAN RUPIAH
pressure. Devaluation has been a JAPANESE YEN
significant inflationary factor for UK MALAYSIAN RING GIT
NEW ZEALAND DOLLAR
construction as in many cases the POLISH ZIOTY
cost of imported materials influences QATAR RIYAL
SAUDI ARABIA RIYAL
around 20%-30% of the total value
SINGAPORE DOLLAR
of a project. Across the Channel, the SOUTH KOREAN WON
relative resilience of the euro in the SWEDISH KRONA
SWISS FRANC
past year will continue to be tested THAI BAHT
as the region adjusts to the post- TURKISH LIRA
Brexit future, as well as competing UAE DIRHAM
POUND
with capital flows responding to the
strength of the dollar. -15% -10% -5% 0% 5% 10% 15% 20%
RISK
DEMAND
VALUE
PROJECT OR PROGRAM LOCATION
(US$ BN)
8. CROSSRAIL LONDON, UK 20
has never been more evident. driving long term asset life-cycle
performance.
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6.0 METHODOLOGY
Edel Christie
Global Solutions Leader, Program Management
T +44 (0)20 781 225 584
E edel.christie@arcadis.com
@edelchristie
Edel Christie
Simon Rawlinson
Head of Strategic Research
T +44 (0)20 7812 2319
E simon.rawlinson@arcadis.com
@SimonRawl
Simon Rawlinson
@ArcadisGlobal
@ArcadisGlobal
Arcadis
www.arcadis.com