Markaz report gives context to construction cost inflation within Kuwait and GCC

Markaz report gives context to construction cost inflation within Kuwait and GCC

Kuwait – Rising commodity prices, higher logistics costs and material supply shortages have all attributed to an increase in construction costs within Kuwait, states a report issued by Kuwait Financial Centre “Markaz” titled “Cost of Construction in Kuwait and its Components”. The report acutely analyses the varied causes of rising construction costs in Kuwait and the greater GCC region, citing spikes in commodity prices and higher inflation across global economies as two of the shift’s primary factors.

According to Markaz’s report, significant price increases in primary raw materials such as structural steel beams, reinforcing steel, softwood timber for framing, copper pipe and copper cable, in addition to labour shortages within the GCC’s construction sector, were identified as causes for the steep rise in construction costs in recent years.

Examining the effects of higher inflation across economies worldwide, Markaz’s recent report dives into the rising prices of imported goods and their effect on development costs in the Gulf region. Geopolitical conflicts and disruptions in the global supply chain have resulted in increase in cost of construction in GCC.

40% of respondents to a construction survey by Turner & Townsend in 2022 highlighting that rises in construction costs are significantly impacting delivery of completed development