DUBLIN has been ranked the twelfth most expensive global construction market and the third most expensive in Europe.
That’s according to new research by global professional services consultancy Turner & Townsend, in their annual International Construction Market Survey (ICMS).
Their findings reveal that the Japanese capital Tokyo topped the list of the most expensive places to undertake construction projects with an average cost of €3,395 per sqm, followed by Hong Kong at €3,304 per sqm and San Francisco at €3,156 per sqm.
Dublin, which comes in at €2,400 per sqm, ranked seventh in the 2019 report but has fallen to twelfth place this year, behind Geneva, Zurich, and Boston.
“This fall in ranking reflects the buoyancy of other construction markets and effects of Covid-19, which placed many projects on hold, restricting demand for new work in 2020,” the report authors explain.
The ICMS forecasts that the rising prices being seen in the global construction sector will be sustained through 2022 and into 2023 – with costs in Dublin forecast to rise 7.5 per cent in 2021 alone.
The report identifies Dublin as one of five global markets currently at risk of overheating, with ‘warm’ tendering conditions set to become ‘warmer’.
The widespread disruption to global supply chains witnessed through the pandemic is also being sustained by high demand and competition for key materials between global markets including the US, Europe and Asia, the report adds.
“Globally, demand for steel, softwood and copper piping have seen prices rise sharply over the year, with increases of up to 40 per cent seen in some international cities, including Tokyo, Sydney, San Francisco, Los Angeles, Birmingham, Glasgow and Dublin,” it explains.
Mark Kelly, Managing Director Ireland at Turner & Townsend, said: “Global supply chain disruption and material shortages are shifting the power dynamic from clients to suppliers, and we can’t escape the reality of soaring construction prices.
“Mitigating against the potential further impacts and project delays will require business to work even more closely with their supply chains – gaining a forensic understanding of the global network supporting their projects and where there could be weaknesses.”
He added: “Business should be looking at where they can make efficiencies and lower costs, including investments in productivity-improving technologies and doubling down on data. “We also know that success is no longer simply a case of ‘better faster, cheaper’, and businesses should be looking to embed social value into projects and operations at every level – particularly the vital drive to net zero.”
According to the research, the most buoyant construction sector across all 90 markets are data centres, driven by the unabated growth in technology and digitalisation.
It is the first year that data centres have topped the ranking, moving up from sixth position in 2019.