Manila edged down slightly in the latest Arcadis 2024 International Construction Costs (ICC) report, moving from 81st to 83rd compared to 2023.
Arcadis, a global design and consultancy firm for natural and built assets, said the Philippine capital saw a minor improvement in its ranking among the most expensive cities to build in globally.
“Despite dropping two spots, construction costs in Manila remain high,” Arcadis said. The slight shift was likely due to steeper cost increases in other cities.
Joycelyn Pagcatipunan, sales director at Arcadis Philippines, said the Philippine construction market reflects the global trend of stabilization and recovery. However, she cautioned of potential challenges as infrastructure projects gain traction.
“These could include difficulties with construction programs, timelines, and securing skilled workers in a tighter market,” Pagcatipunan said. “Embracing technology and data-driven decision-making will be crucial for managing risks and ensuring project success.”
The report noted that the Philippine construction sector faces its own challenges. Inflation reaching 6% in 2023, combined with supply chain disruptions, pushed up material prices. High labor costs also contribute to the overall expense of construction projects.
“Despite the challenges faced in 2023, we remain optimistic about the sector’s resilience,” said Monina Munsayac, executive director for cost and commercial management at Arcadis Philippines.
Munsayac pointed to upcoming infrastructure initiatives and the continued demand for sustainable projects as promising prospects. “The Philippine construction industry is poised to adapt by implementing various strategies, including enhanced procurement methods, digital tools integration, and a continuous focus on cost optimization,” she said.
The Arcadis ICC covers 100 major cities across six continents. The cost comparison spans 20 different building types, including residential, commercial, and public sector developments. It’s based on construction cost surveys, market condition reviews, and expert judgment from Arcadis’ global team.
Calculations are based in U.S. dollars and indexed against the price range for each building type relative to Amsterdam.
The report noted that 2023 was a difficult year globally, with high borrowing costs undercutting the positive impact of infrastructure investment in many countries. Arcadis also highlighted the rapid growth of investment in the advanced manufacturing and technology sector, including data centers, pharmaceutical facilities, and semiconductor fabrication plants.
