EC Harris research shows construction prices around the world are falling in response to the global downturn

[August 2009]

International building costs research carried out by consultants EC Harris across its offices worldwide shows that even the low construction costs in countries such as Slovakia, Bulgaria and Latvia are still almost twice those of India and Taiwan, while costs in Africa - Kenya and Ghana - are running at around 35% of those in the UK.

Peter Madden, Regional Leader, Europe and North Africa comments: “The global recession and collapse in world markets have created the most challenging economic conditions in living memory and delivered a body blow to the construction industry. Construction spending in the Middle East has slowed, the US and Western Europe have seen a sharp contraction in spending, while the Asia Pacific region is hampered by falling demand for Asian exports.

“The effect of falling workload has seen the cost of construction in the UK fall steeply over the past year while the weak pound has reduced UK costs against most European countries. The UK construction market is not expected to return to positive territory until 2011.”

The research shows Denmark is among the most expensive countries in which to build. Labour rates of up to 380 Euros (£330) per day contribute to prices being some 35 - 40% higher that those in the UK.  Despite this, prices in Denmark showed little movement over the past year.

In the CEE region, many of the ‘new’ EU states appear to have weathered the downturn in construction workload somewhat better than the UK, partly driven by increased infrastructure development. In countries such as Poland and Slovenia construction costs are around 70% of the UK, while prices in Slovakia, Serbia, Macedonia and Bosnia are all less than half of UK prices. Construction spending is projected to grow through 2009 though at a considerably subdued rate.

The worst hit is Spain, with the construction industry suffering horrendously over the past couple of years, due to years of overbuilding. Construction output is expected to fall by around 8% this year and the Spanish economy is expected to shrink by 3.8%. Building prices have stagnated over the past year with 10% cuts in site rates compensated by increased materials costs.

The figures come from a global survey carried out by EC Harris, with data collected in cost per m² format.  The research forms part of the EC Harris ‘International Building Costs’ handbook, which contains cost per m2 figures for 44 different building types, across all sectors including offices, retail, leisure, residential, hotels, etc. It also provides snapshot of  how costs vary in 48 countries around the world with prices compared to South East England.

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Notes to Editors

About EC Harris

EC Harris is an International Built Asset Consultancy - acting as trusted advisors to clients - in planning and executing strategies that optimise the construction, operation, use and ownership of built assets.  The firm has 46 wholly owned offices in 24 countries employing 3,400 people.  Turnover in 2008/09 was £306m.