Bristol has ranked as the 13th most expensive city globally to build in, according to a new survey.
Arcadis’s International Construction Costs' report said that the UK city slipped by two places from last year, following Oslo (12th) and Macau (11th). Bristol was also named the second most expensive in the UK and Ireland, coming in behind London.
According to the report, entitled 'New Horizons', a number of factors impacted costs, including high levels of inflation, which continued to affect most cities globally. As a result, many of the top 10 most expensive cities remained unchanged from last year, including hotspots such as Munich, Copenhagen, and Zurich.
Arcadis also attributed the invasion of Ukraine in 2022 to the impact on European market costs, seeing a rise in energy costs resulting in disruption to local manufacturing supply chains and region-specific energy markets adding 5-6% to the region's inflation. However, despite these economic headwinds, the South West is "set to be a construction hot spot," with recent new orders above the long-term trend.
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The report showed that industrial growth performed well, as did infrastructure with Hinckley Point nuclear power station's continued contribution to future work. By contrast, Wales has seen a significant decline in both workload and pipeline over the past two years, even if prospects did perk up a little in 2022. Yet Arcadis said that growth of the local workforce has not kept pace with growth in workload, suggesting that the market in Bristol and the South West will "continue to rely on attracting a mobile workforce."
Simon Rawlinson, head of research and strategic insight at Arcadis said: “Bristol developers have faced many challenges during 2022 with many large residential and commercial programmes exposed to accelerating inflation. Competition for labour and supply chain resources in the city is intense given Bristol’s proximity with Hinkley Point, Europe’s single-largest infrastructure project.”
According to the report: "Research found improved building standards and low carbon building design were significant contributing factors on construction pricing in the UK."
However, with the need to mitigate against climate change and with more stringent carbon reduction targets coming to the fore, Arcadis said sustainable buildings in prime locations were increasingly in high demand.
The frim reported as a result "it is critical" for owners and investors to take a long-term view when prioritising expenditure in order to preserve value. Therefore Arcadis recommended a 'do nothing' approach, saying it has the potential to accelerate what it termed the 'obsolescence horizon', driven by net-zero requirements.
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