As the Middle East invests in national-building agendas that promote economic diversification away from fossil fuels, leading Middle Eastern markets continue to see high growth in construction activity, according to international professional services company Turner & Townsend.
Based on a industry expert's International Construction Market Survey, the Kingdom of Saudi Arabia leads the region in terms of new project opportunities and government commitment to major infrastructure investment. The average cost of construction in Riyadh is $2,379 per square meter, while market activity in Doha is slowing down following unprecedented World Cup programs.
The poll also reveals that the region has been less impacted by the sluggish growth experienced in other markets and the disruption of the supply chain. Turner & Townsend noted that the Middle East represents a relative bright light in an unfavorable global construction environment, with many regions dealing with severe workforce shortages, high costs, and inflation.
As per data from the leading consultancy, 74.2% of international markets exhibit a "skills shortage" in the report. Six US cities rank in the top 10 most costly cities in the world to develop in, according to a study of 89 cities around the world. With an average build cost of $5,451 per square meter in New York, San Francisco is the most expensive market, coming in at $5,200.
The most expensive location to build in the region is Doha, with an average cost of $2,588 per sq m. Qatar has seen sustained cost inflation due to extensive construction activity in recent years, in particular to prepare for the FIFA World Cup in 2022, it stated. The Doha market is now cooling, following the completion of the competition, with the rate of cost inflation easing from 8.0% in 2022 to 3.5% in 2023.