Birmingham ranks 14th most expensive city in the world to build
Birmingham is the 14th most expensive city in the world in which to build, according to the latest Arcadis 2024 International Construction Costs (ICC) report, released by the global design and engineering consultancy.
London has narrowly overtaken Geneva to top the rankings once again as the most expensive city in the world in which to build.
According to the study of comparative construction costs across 100 global cities, enhanced specifications associated with safety and sustainability have been pushing prices upwards, causing London to overtake Geneva (2nd) in the rankings, closely followed by Zurich (3rd) and Munich (4th).
Rising costs and double-digit price growth in Munich have propelled the Bavarian capital significantly up the rankings, this year surpassing major US cities like New York (5th) and San Francisco (6th) in terms of relative cost to build.
The 2024 Arcadis International Construction Costs Index covers 100 of the world’s large cities across six continents.
The cost comparison was developed covering twenty different building types, including residential, commercial, and public sector developments, and is based on a survey of construction costs, a review of market conditions and the professional judgement of Arcadis’ global team of experts.
The calculations are based in USD and indexed against the price range for each building type relative to Amsterdam.
Arcadis notes in particular the rapid acceleration of investment into the advanced manufacturing and technology sector, including data centers, pharmaceutical facilities, gigafactories and wafer-fabs.
The sheer scale and complexity of these end-date-critical projects inevitably results in more financial risk, meaning that clients need to evolve their design, procurement, and construction capabilities even as these multi-billion-dollar programs are being built.
On the whole, cities in the UK and Ireland (UK&I) are relatively expensive places to build. All sat within the top 25 most expensive construction locations in the world, except Belfast which ranked 28th.
New regulations focused on low carbon emissions and improved building safety also created uncertainty and added to project costs. Uncertainty could continue in 2024 following the local, mayoral and national elections.
Tight fiscal conditions will see increasing pressure on the public purse in 2024 and beyond, with real-terms cuts in government capital investment currently projected from 2025 until 2029.
Whilst optimism as measured by the construction PMI has improved, the legacy of a weak order book from 2023 will delay recovery until late 2024 before the positive sentiment is realised.
Simon Rawlinson (pictured), head of research and strategic insight at Arcadis said: “Current plans to reduce public investment will reduce pressure on an overheated construction sector. With minimal GDP growth and high interest rates, many projects face viability challenges due to regulatory and election uncertainties.
“As fiscal conditions tighten, public/private sector collaboration is crucial for investment and urban renewal. Despite challenges, infrastructure, particularly in energy transition and water projects, shows promise.
“The cancellation of later HS2 rail phases has led to transport spending disruptions and fund reallocation.”
