According to a
recent study, UK construction costs are among the most expensive in Europe when
calculated in Euros.
The post-EU
Referendum weakening of Sterling against the Euro will have increased the UK
costs in this study.
The Council of
European Construction Economists (CEEC) carries out an exercise each year to
compare construction costs between countries. BCIS contributes UK costs to the
study on behalf of RICS.
Participating
members price a standard office block model, developed to allow comparisons of
construction costs between the member countries. The model is based on a set of
agreed measurements and quantities, which reflect the key materials/structure
of a typical office building. The costs include an allowance for external
works, preliminaries and contingencies.
CEEC office cost
model comparisons are expressed in Euros using exchange rates at the time the
study was carried out (June 2018). Exchange rates, particularly Sterling, have
been volatile in recent years against the backdrop of the UK's negotiations to
exit the EU.
The movement and
fluctuation of exchange rates tends to distort how one country's construction
costs compare with another's. BCIS has therefore compared the costs directly in
the table below. The conversion factors are derived by dividing the costs, in local
currencies, by the costs in a single country, also in local currency. The
results are building cost exchange rates usually referred to as purchasing
power parities (PPP). The PPPs are affected by any differential movement in
construction costs between countries but not directly by fluctuations in
exchange rates.
A known cost in one
country can be expressed in equivalent cost in another country by multiplying
by the factors in the rows (or dividing by the factors in the columns).
For example, a
project costing €1m in Ireland would cost £950,000 in the UK, €980,000 in
Finland, 20,950,000 Koruna in Czech Republic, etc. Similarly, a project costing
1bn Forint in Hungary would cost €350,000 in France, €350,000 in Netherlands,
480,000 Francs in Switzerland, etc.
