Global Construction Costs Under Pressure into 2023

The Covid-19 pandemic and the war in Ukraine mean global pressures on the construction industry will continue well into 2023. Oxford Economics reported that cost overruns, project delays, cancellations and more construction insolvencies are to be expected.

They warn that ‘Government stimulus will ensure demand for construction activity remains strong over the coming years, while supply side disruptions are set to hamper industry capacity. The mismatch between supply and demand point to construction costs remaining high into 2023.’

In the global residential sector, costs associated with building a single detached home have jumped, by anything from just over 5% across the European Union, to almost 25% in Canada.

Governments around the world have responded to the pandemic by fast-tracking major infrastructure works and a shortage of labour can also be seen, through an unprecedented number of construction job vacancies.

Subsequently, wages for labour are expected to rise. A continued effort from governments across the world, to counteract these strains on their national economy, is needed and expected.