San Francisco has displaced New York City as the most expensive place to build, with an average cost of $417 per square foot, Turner & Townsend reports in its latest International Construction Market Survey.
Costs are expected to rise by six per cent in the next 12 months.
In comparison, the average construction cost in New York city was $386 per square foot, a slight increase from last year’s $362 per square foot. Costs in New York are expected to increase by 3 percent.
New York City continues to have the highest US labor costs at an average of $101.30 per hour, second to Zurich, Switzerland where costs reach $110.70 per hour. San Francisco labor costs on average $90 per hour.
“The big challenge for the San Francisco Bay Area and wider U.S. construction market is meeting this demand in the face of import tariff talks, escalating materials costs, and a shrinking skilled labor force,” John Robbins, Turner & Townsend’s managing director U.S. and North America head of real estate, said in a statement. “Simply turning to local supply isn’t solving the problem… clients are considering other strategies to develop their real estate – from alternate and more unique construction methods, to reductions of their build programs.”