The North/South divide in UK construction costs is closing, according to Turner & Townsend’s International Construction Market Survey 2017.
The research, which examines 43 construction markets around the world, reveals the average construction cost per square metre. But while construction cost inflation in the South of England is set to fall from 3.5% to 2%, the North of England’s construction costs will rise by 3.6%.
However, London is still far ahead in terms of inflation, with construction costs (which reached $3,214 per sq m last year) expected to rise in the capital by 4.1% during 2017.
Infrastructure projects and the construction skills gap are two contributors to the rise in construction costs. Steve McGuckin, global managing director – real estate at Turner & Townsend, said: ‘London has long been the engine room of the UK construction industry, but the market in northern cities is starting to pick up steam. Against this backdrop, the UK construction industry needs to boost productivity levels. There is an urgent need for contractors and clients to embrace innovative technologies and new methods of construction, as well as using data analytics and better programme management to increase output.’
At Eque2, we’ve seen first-hand the importance of managing construction costs, for SMEs and larger contractors. As Steve McGuckin says, investing in innovative technology, such as construction management software, is key to ensuring contractors can run their businesses as efficiently as possible and reap the rewards.