New York City Skyline
Every year, Turner & Townsend, a construction and project management consultant in the UK, performs a large scale International Construction Market Survey. The survey examines spending and cost trends from major markets from around the world to provide insight on the construction industry’s global performance.
This year, 4 US cities landed on the list for most expensive cities to build in: New York, San Francisco, Seattle, and Houston. These cities don’t come as a surprise, since all 4 have plenty of construction projects happening and are all extremely populated. Last year, Seattle actually had the most cranes erected at one point in all of America, totaling 58.
Total costs were based upon average price per square meter of 6 different types of construction, including high-rise apartments, office blocks, large warehouse distribution centers, hospitals, schools, and shopping centers. After converting the cost per square meter to cost per square foot, New York City roughly averages $380/sf, San Francisco $350/sf, Seattle $300/sf, and Houston $250/sf. Zurich, Switzerland is the second most expensive city to build in internationally, averaging about $352/sf.
24 of the 43 markets that were analyzed are shown to have a labor shortage. All four of the US cities are suffering from a skills shortage. Only 4 were listed as having a surplus of labor: Muscat, Perth, Santiago, and Sao Paulo.
Labor rates are not only a driving factor in construction costs, but also incentivize companies to find ways to use less manual labor on projects. The report states that plumbers and electricians in New York are making an average hourly wage of $103, compared to $100 in San Francisco, $85 in Seattle, and $59 in Houston. Carpenters and bricklayers are listed at $91/hr in New York City, $70/hr in San Francisco, $68/hr in Seattle, and $51/hr in Houston. Site foremen are making $140/hr in New York, $110/hr in Seattle, $109/hr in San Francisco, and $98/hr in Houston, according to the report.
The report also expects costs to increase in the 4 US cities, including Seattle (5%), San Francisco (5%), and New York City (3.5%), and Houston (2%). Seattle’s market has been listed as “overheating,” which is the highest on the chart, and the San Francisco and New York City markets were listed as “hot.” Houston was listed as “lukewarm,” meaning their market is expected to remain even in the future.
Full Report: International Construction Market Survey 2017 | Turner & Townsend
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