Results from the International Construction Market Survey 2016, conducted by Turner & Townsend, reveal that Australian cities are among the top 25 most expensive places for construction projects in the world.
Compared to last year, however, construction costs have steadied, remarks Gary Emmett, senior economist for Turner & Townsend.
Zurich is the world’s most expensive city for construction projects, but Sydney (14), Perth (18), Melbourne (20) and Brisbane (22) are in the top 25.
Emmett said the time is ripe for the Australian construction industry to find cost savings.
“To ensure Australian prices stay at reasonable levels, the construction industry must think differently and look for cost savings within the supply chain where the biggest savings and innovation can be found. These include manufacturing production, design and logistics.”
He added: “The industry needs to collaborate with suppliers to look for savings as opposed to traditional adversarial relationships. The use of building information modelling (BIM) will help the industry collaborate to gather data and share plans throughout the lifecycle of an asset to find greater cost saving efficiencies.”
Construction costs in Australia are expected to rise 2.5% on average in 2016 compared to 2.9% globally.
Emmett said the tender process also dampened profit margins. “There is an opportunity now for the industry to look at different delivery and commercial models to improve productivity and margin on projects.”