SINGAPORE (EDGEPROP) - Despite mixed economic conditions, the construction outlook for Asia continues to be buoyant, according to the latest edition of the International Construction Market Survey. The annual survey by consulting firm Turner & Townsend charts the average construction cost per sqm for commercial, residential and industrial projects in 89 markets worldwide.

In Asia, strong demand in established real estate markets like Singapore, Hong Kong, Japan, and South Korea faces skills shortages and rising labour costs, leading to increased construction expenses.

Tokyo and Osaka are Asia's priciest cities for construction, with Tokyo at US$4,567 ($6,167) per sq m and Osaka at US$4,497 per sq m. Globally, Tokyo ranks fifth, and Osaka ranks sixth in construction cost.

The average construction cost per sqm for Hong Kong clocked in at $4,292, placing it in 11th position among the top ten markets globally. Meanwhile, Singapore's construction cost averages US$3,307 per sqm, ranking it fourth in Asia and 31st globally.

Turner & Townsend highlights that Singapore saw the highest rate of construction cost escalation last year at 12%. As the market continues to face skills capacity challenges and high labour and material costs, the firm is anticipating construction costs to remain high, with a growth rate of 8% projected for 2023.

Singapore remains supported by a strong pipeline of construction projects driven by public housing, infrastructure, commercial developments, and an emerging biomedical sector. Elsewhere, Japan’s construction activity is bolstered by a strong backlog of construction projects in the lead-up to the World Expo that will be held in Osaka in 2025, while Hong Kong and Mainland China are expected to see a recovery in their construction sectors following the lifting of prolonged Covid-19 restrictions.

The survey also notes that construction activity in emerging markets such as India, Indonesia, Malaysia, Vietnam and the Philippines is warming up amid significant investments in real estate and growing expansion of data centres, manufacturing and life sciences.

“Asia’s diverse and ambitious market economies place it in a strong position to command sustained construction growth and attract investment, particularly in industrial, science and technology, healthcare, transport and real estate developments,” says Cheryl Lum, director and head of data and research at Turner & Townsend Asia.