- New York, San Francisco, and Philadelphia among some of the most expensive cities for construction
- Construction opportunities help make North America an attractive region for technology sector
- A focus on improving productivity in design, procurement, and construction will be essential to overcome risk, assure viability and deliver projects at scale
16 April 2024 – New York, San Francisco, and Philadelphia top the rankings once again as the most expensive cities 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 today.
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.
2023 was a difficult year across the world, with high borrowing costs undercutting the positive impact of infrastructure investment in many countries. In the US, supply chain issues for talent and materials created a challenge for clients to choose projects with minimal risk. Additionally, the increasing demand for labor, materials, and power means that productivity is now becoming an increasingly critical factor in investment decisions and project viability.
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.
David Hudd, Head of Cost & Commercial Management, North America, at Arcadis said:
“From a global perspective, the North America market has been seen as an attractive region for growth due, in part, to having a surplus of land that can allow for de-risking construction projects. High demand for the construction of data centers and gigafactories can also be attributed to this ‘flight to America’ for construction projects.”
Martijn Karrenbeld, Global Director for Industrial Manufacturing at Arcadis, explained:
“The key priority for clients is delivering an operational facility on time, but in a resource-constrained market, existing supply chains and delivery models might not be adequate to provide the assurance needed to protect multi-billion investments. This will place a premium on productivity-led design, procurement, and construction to deliver projects at scale – and project teams need to be ready to adapt.”
Arcadis sets out a practical five-point framework in its report, which outlines a comprehensive approach focused on delivering fast, complex programs. Applicable to all markets and sectors, the framework offers prompts to help build-in resilience to deal with setbacks, scale and manage risk, model program interdependencies, and invest in data and live project controls to increase confidence and assurance.
Edel Christie, Chief Growth Officer at Arcadis, said:
“As conditions stabilize for construction sectors globally, the market for delivery is evolving at a rapid pace. Better use of data, insight and decision-making is critical – whether that’s to meet sustainability requirements, improve stakeholder management, attract more capacity, or better engage with the capabilities of a global supply chain. Delivering according to plan is critical and, even as construction programs become more complex and resources harder to secure, the need to effectively manage risk will be critical for start-ups and industry champions alike.”
For more information, the full report can be downloaded here.
10 most expensive cities
1. London
2. Geneva
3. Zurich
4. Munich
5. New York City
6. San Francisco
7. Philadelphia
8. Copenhagen
9. Hong Kong
10. Bristol
10 least expensive cities
100. Buenos Aires
99. Lagos
98. Kuala Lumpur
97. Nairobi
96. Bengaluru
95. Johannesburg
94. Delhi
93. Mumbai
92. Chengdu
91. Hi Chi Minh
