Study: Construction costs are the fifth highest in the region in Prague

Prague – Construction costs in Prague are the fifth highest compared to eight larger cities in Central and Eastern Europe, with Vienna being the most expensive. Last year, construction costs in Prague were the second highest. In the context of a hundred global cities, Prague ranks 67th. The highest construction costs are in Geneva. This is clear from the results of a study by the international consulting company Arcadis, which CTK has available.

"The construction market has considerable inertia due to long-term contracts and large projects. Construction costs are still holding at their maximum in the Czech Republic despite the coronavirus pandemic. This is due to the limited capacity of domestic construction companies, a shortage of construction workers, and building materials from abroad, as well as the annual increase in labor and construction material prices. In 2021, construction costs are expected to continue to rise slightly, by a maximum of two percent," stated Arcadis analyst Milan Vencl.

According to the Czech Statistical Office, construction costs in the Czech Republic rose by 3.7 percent year-on-year last year.

Vienna, with the highest construction costs in the region, ranks 30th in the global comparison. It is followed by Zagreb (64th), Bucharest (65th), Sofia (66th), Prague (67th), Warsaw (70th), Belgrade (72nd), and Krakow (75th).

In the top ten with the highest costs, six European cities made the list. Besides Geneva, these include London (2nd), Copenhagen (3rd), Oslo (4th), Zurich (5th), and Dublin (9th). In contrast, the three cities with the lowest costs are from India, specifically Bengaluru, New Delhi, and Mumbai. There has been no change in this since 2020.

Arcadis also notes that construction companies faced delays in the delivery of construction materials from abroad and a shortage of foreign construction workers due to the coronavirus pandemic. The rise in construction costs is primarily attributed to increasing commodity prices, especially oil, copper, iron, and aluminum, as well as building materials, energy, and labor.

According to the Union of Construction Entrepreneurs, the value of public sector investments rose by 29.6 percent last year compared to 2019. Investments in infrastructure grew by 38 percent year-on-year. The largest growth was recorded in transport infrastructure, which increased by 44.4 percent year-on-year.

Arcadis is an international consulting company focused on construction, the environment, and sustainable development, and it publishes the annual results of the International Construction Costs (International Construction Costs 2021). The Arcadis ICC Index 2021 tracks 100 cities around the world, evaluating their construction costs and market conditions. The study also takes a second look at construction in light of the ongoing coronavirus pandemic and climate change.