The dark cloud of the global financial crisis appears to be lifting over the world’s construction industry, and a new report reveals growing optimism in a strengthening global market.
Sydney and Melbourne were among the cities where building activity was regarded as “hot” due to the high number of projects, as revealed in Turner & Townsend’s International Construction Market Survey 2018.
And Perth was one of only two markets (Muscat was the other) that saw a fall in construction costs.
New York City remains the world’s most expensive place to build with an apartment block costing an average of US$3900 ($5194) a square metre.
San Francisco took second spot on the list with construction costs of US$3736 ($4969) per square-metre, followed by Hong Kong at US$3703 ($4925). The top five are rounded out by Zurich and London.
Locally, Sydney was considered the most expensive city for construction, coming in at ninth place on the global tally, while Melbourne ranked 19, Brisbane at 21 and Perth at 23.
Sydney and Melbourne were considered “hot,” according to the report, while Brisbane is “lukewarm” and Perth is “cold".
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Turner & Townsend economist Gary Emmett said construction in Australia is entering another growth phase.
“Which is set to continue until the end of this decade led by road and rail projects, commercial, health, retail, defence and hotel sectors,” Emmett said.
“Sydney and Melbourne are witnessing strong growth in financial services, and real estate, with 17 per cent jobs growth during the year. Unemployment has fallen to 5.4 per cent,” the report states.
Globally, Emmett says this is the strongest construction year seen since the global financial crisis.
“Since the GFC, growth amongst the major advanced economies averaged half the pace of the previous ten years,” Emmett said.
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Australia's infrastructure surge ‘positive’
With a spike in infrastructure spending, the report pegs Australia’s economy in 2018 as positive.
“Major road and rail projects are ramping up, boosting the local economies and demand for trade skills. Tunnelling is a focus. Sydney Metro Rail is delivering 15 kilometres of tunnels, and Westconnex, a mostly underground 33 kilometre roadway, is under way.”
The report reveals activity increased in 21 of the 46 international markets surveyed.
Australia, USA, Europe, Japan and China experienced a synchronised activity upswing, with global construction costs expected to rise 4.3 per cent in 2018, following a 4.1 per cent increase in 2017.
On the global front, several European economies are rapidly expanding including Spain, France, and Italy. The European economy continues to strengthen, growing by 2.6 per cent at the end of 2017.
Global construction costs are expected to rise 4.3 per cent in 2018 following a 4.1 per cent rise in 2017.
