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BusinessToday
5 days ago
- Business
- BusinessToday
Malaysia's Construction Sector Remains Resilient Amid Trade Tensions And Cost Shifts
Southeast Asia's construction sector is demonstrating robust resilience and adaptability despite prevailing global economic headwinds and geopolitical uncertainties, according to the latest Global Construction Market Intelligence (GCMI) report 2025 released by Turner & Townsend, a global professional services company. The report, which provides an in-depth analysis of construction costs across 99 markets worldwide, highlights Southeast Asia's increasing competitiveness added that while construction costs are rising in certain areas, the region is experiencing a significant surge in demand for critical infrastructure, particularly data centres, alongside a strong shift towards sustainable building practices. These combined factors are positioning Southeast Asia as an increasingly attractive destination for global investment in the built environment. Brian Shuptrine, Asia Managing Director at Turner & Townsend, commented on the findings: 'We are seeing dynamic trends across Southeast Asia, where markets are not merely navigating global economic headwinds but actively seizing opportunities for growth through recalibration of costs and demand. The region's commitment to digital transformation and sustainability, and the strategic advantages of nearshoring, are fundamentally reshaping the construction landscape. This translates into significant opportunities for clients investing in future-proof assets, particularly within the rapidly expanding data centre developments and advanced manufacturing sectors.' The report stated that the Malaysian construction sector is poised for continued growth, propelled by public infrastructure projects like the MRT3 Circle Line and Penang LRT, as well as robust private sector demand for digital infrastructure, notably data centres. While Kuala Lumpur maintains relatively low costs at US$1,354 per m², the recent expansion of the Sales and Service Tax (SST) to cover most construction work services (excluding residential buildings) introduces new cost pressures. The industry is responding by embracing digital solutions and collaborative models to protect profitability and increase competitiveness, with a gradual shift towards greener building practices like reducing embodied carbon. As for Singapore, the sector remains one of Southeast Asia's most expensive markets, with average construction costs at US$3,104 per m². Despite anticipated inflation of 3.0% in 2025 and 5.0% in 2026, construction activity remains strong, with contract awards in the first four months of 2025 up approximately 60% compared to the same period in 2024. Challenges persist with tight contractor capacity, skilled labour shortages (especially in MEP trades), and rising waste management costs, driving interest in collaborative contracting models. Meanwhile, Jakarta offers one of the region's most cost-competitive construction markets in Indonesia at US$943 per m², with a steady escalation of 3.0%. The market is gaining gradual momentum, primarily driven by strong activity in the data centre sector as Indonesia's digital economy expands. Local developers are increasingly securing large-scale data centre projects, showcasing growing in-country capabilities. However, reliance on high-quality imported materials for major projects can strain budgets. Regional Challenges and Opportunities: A significant concern across Southeast Asia is the persistent shortage of skilled labour, particularly in Mechanical, Electrical, and Plumbing (MEP) trades, affecting 90.9% of Asian markets, including Singapore, Malaysia, Indonesia, and Vietnam. This underscores the urgent need for investment in training and local workforce development to meet surging demand for green-collar professionals. Sumit Mukherjee, Managing Director of Southeast Asia and Head of Real Estate of Asia at Turner & Townsend, emphasized that while cost remains critical, the focus is increasingly shifting towards value, efficiency, and supply chain resilience. 'The abundance of materials, especially from China, offers opportunities for faster and more cost-effective project delivery in some markets,' Mukherjee stated. The report further indicates that data centers have overtaken industrial, manufacturing, and distribution as the top-performing construction sector in Southeast Asia, reflecting the soaring demand for digital infrastructure. Corporate occupier activity has also rebounded, with a modest uptick in hospitality, sports, and leisure developments as tourism recovers. Looking ahead, nearshoring trends and the escalating demand for advanced manufacturing facilities are key drivers of heightened construction activity. Markets like Vietnam and Malaysia could benefit from a potential redirection of surplus Chinese material supplies if reciprocal tariffs with the U.S. persist, which could accelerate delivery, manage costs, and boost local manufacturing capacity. However, Malaysia's recent trade policy changes, including anti-dumping duties, introduce some uncertainty regarding future costs and supply chain decisions. Turner & Townsend advises clients to prioritise upskilling domestic workforces and strengthening local supply chains to mitigate risks, improve cost control, and ensure successful project delivery in the region's dynamic and growing construction landscape. Related
Newsweek
5 days ago
- Business
- Newsweek
US Cities Among World's Most Expensive To Build In
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Five cities in the U.S. now rank among the world's 10 most expensive places to build, new data suggests - with New York City maintaining the top spot for construction costs worldwide. New York, San Francisco, Los Angeles, Chicago, and Philadelphia are among the cities with the steepest costs for construction projects, according to Turner & Townsend's 2025 Global Construction Market Intelligence report. Why It Matters The ranking could be due in part to a combined impact of labor shortages and rising material prices on ongoing and future U.S. projects, analysts say. This trend complicates efforts to address the country's housing shortage, with Turner & Townsend forecasting construction inflation to remain above target into 2026. What To Know New York City is in first place in the study, followed by San Francisco. Three European cities - Zurich, Geneva and London - are the next most expensive in which to build, followed by Los Angeles, Chicago, and Tokyo. Philadelphia placed ninth in the ranking, with the Japanese city of Sapporo in tenth. The study attributed the high costs in U.S. cities to soaring labor rates and an ongoing shortage of skilled construction workers, challenges which have been intensified by a national housing crunch. Construction work continues April 8, 2025 at the site of a 15-story jail complex in the Brooklyn borough of New York City. Construction work continues April 8, 2025 at the site of a 15-story jail complex in the Brooklyn borough of New York City. Getty Images The Turner & Townsend report noted that 87 percent of North American construction markets continued to report skills shortages, particularly in specialized trades such as mechanical, engineering, and plumbing. Neil Bullen, managing director of global real estate at Turner & Townsend, said: "We're seeing shifting priorities and challenges across the globe. Geopolitical tensions and increasing polarisation are changing where and how investment flows." The study said these factors had led to escalating construction inflation, with U.S. construction labor costs averaging $76 per hour, and reaching as high as $131.4 per hour in New York. The results come as President Donald Trump announced a new 50 percent tariff on copper imports on Wednesday, citing the metal's strategic importance for defense and infrastructure. The tariff is set to come into effect on August 1, according to the president's announcement on Truth Social. What People Are Saying Anirban Basu, chief economist of Associated Builders and Contractors, told Newsweek: "Construction input prices increased at a rapid pace for the third consecutive month in March and have now risen at a 9.7 percent annualized rate through the first quarter of 2025. "The emerging effects of tariffs are glaring in the March data release, with iron and steel, steel mill products and copper wire and cable prices all rising more than 5 percent for the month." What Happens Next With industry experts and policymakers fearing US construction costs are likely to stay elevated due to both global and domestic factors, they face difficult decisions about boosting supply and containing inflation. As tariffs and skills shortages persist, the affordability crisis may deepen, affecting both commercial and residential development in major American cities.
Sydney Morning Herald
7 days ago
- Business
- Sydney Morning Herald
Brisbane now most expensive place to build in Australia
Brisbane is now the most expensive place to build in Australia, according to new data. It could push house prices higher and cause further blow outs or delays for major projects. It now costs $5009 per square metre – or about 3 per cent more than second-placed Sydney – on average to build in the city, the 2025 Global Construction Market Intelligence report from Turner and Townsend shows. 'Look, we are pretty concerned about capacity constraints in the Queensland market over the coming years,' project director Tiffany Emmett said. 'We're expecting that they're going to need to draw on interstate resources and skills to help deliver the pipeline. 'If they don't, then obviously there's the risk of budget overruns, projects being delayed, and potentially some projects not even going ahead because they just can't get the ... workers or there just isn't the capacity in the market to deliver them.' Construction costs in Brisbane rose 4.4 per cent last year, and are expected to increase a further 5.5 per cent in 2025 – more than anywhere else in the country. Emmett reports the increases are exacerbated by a growing pipeline of major infrastructure projects – including Cross River Rail, the Brisbane Metro, hospital rescue program, and a new stadium at Victoria Park – in the lead up to the 2032 Olympic Games, as well as significant interstate migration. The Queensland government has previously said it may need to bring more workers in from other states to complete projects. The average wage for Brisbane workers in construction is now $77 an hour, according to Turner and Townsend.
The Age
7 days ago
- Business
- The Age
Brisbane now most expensive place to build in Australia
Brisbane is now the most expensive place to build in Australia, according to new data. It could push house prices higher and cause further blow outs or delays for major projects. It now costs $5009 per square metre – or about 3 per cent more than second-placed Sydney – on average to build in the city, the 2025 Global Construction Market Intelligence report from Turner and Townsend shows. 'Look, we are pretty concerned about capacity constraints in the Queensland market over the coming years,' project director Tiffany Emmett said. 'We're expecting that they're going to need to draw on interstate resources and skills to help deliver the pipeline. 'If they don't, then obviously there's the risk of budget overruns, projects being delayed, and potentially some projects not even going ahead because they just can't get the ... workers or there just isn't the capacity in the market to deliver them.' Construction costs in Brisbane rose 4.4 per cent last year, and are expected to increase a further 5.5 per cent in 2025 – more than anywhere else in the country. Emmett reports the increases are exacerbated by a growing pipeline of major infrastructure projects – including Cross River Rail, the Brisbane Metro, hospital rescue program, and a new stadium at Victoria Park – in the lead up to the 2032 Olympic Games, as well as significant interstate migration. The Queensland government has previously said it may need to bring more workers in from other states to complete projects. The average wage for Brisbane workers in construction is now $77 an hour, according to Turner and Townsend.
Extra.ie
09-07-2025
- Business
- Extra.ie
Revealed: Dublin tops list of EU cities with most expensive building costs
It costs more to build in Dublin than in any other EU city, an independent report has found. The consultancy company Turner & Townsend's Global Construction Market Intelligence report shows that average construction costs in the capital are now €3,692 per square metre. The study attributes the expense of building in Dublin to investment in data centres and commercial property as well as mounting pressure from the Government's pledge to deliver more than 300,000 new homes by the end of the decade. It costs more to build in Dublin than in any other EU city, an independent report has found. Pic: Shutterstock It also points to skills shortages, digital adoption gaps and regulatory hurdles as risks that could further hinder delivery and make building more expensive. 'While Ireland's construction market shows resilience and sustained demand, particularly in high-tech and residential sectors, cost pressures and structural challenges threaten to limit capacity just when it's most needed,' said Philip Matthews, managing director at Turner & Townsend Ireland. In the EU costs table, Munich, Frankfurt, Vienna and Copenhagen follow Dublin, while overall, our capital's building costs are the 18th highest in the world. In the EU costs table, Munich, Frankfurt, Vienna and Copenhagen follow Dublin, while overall, our capital's building costs are the 18th highest in the world. Pic: Shutterstock Despite concerns about pressure on the national grid, demand for data centres continues to rise, especially as the adoption of artificial intelligence drives European digital infrastructure needs. The report also forecasts regional inflation in Ireland will decline from 2.9% to 2.4% this year, offering some short-term stability. All European markets reported insufficient mechanical, electrical and plumbing labour availability, reducing the capacity of the Irish construction sector. Furthermore, less than half of Irish clients are pursuing digital transformation or building information modelling, compared with a majority of companies in Zurich, Geneva and Copenhagen. Overall, more than six in ten European respondents cited bureaucracy and delayed approvals as a constraint. 'Despite these challenges, the report highlights balanced market conditions in Ireland, with continued investor confidence. Ireland's challenge now is to build smarter, not just more,' added Mr Matthews. 'Targeted upskilling and streamlined planning are essential if we are to match ambition with delivery.' It comes as the latest AIB Construction PMI report found that construction output declined at an accelerated pace in June, driven by contraction in housing and civil engineering sub-sectors.
