Bahrain construction costs ranked highest in MidEast

New global report shows it is almost half as expensive to build in Saudi Arabia as Bahrain
Bahrain construction costs ranked highest in MidEast
By Andy Sambidge
Wed 20 Jul 2011 05:49 PM

Bahrain has been named as the Middle East's most expensive country to build and appears in a top 20 of the most expensive countries across the world, according to consultancy EC Harris.

According to the annual International Construction Cost Report released on Wednesday, the price of construction in Bahrain is on a par with the UK.

Building in Bahrain is six percent more costly than in Qatar, their closest Middle East neighbour on the list.

Qatar was ranked 15th overall with construction costs more expensive than the likes of the US, Russia and China.

Nick Smith, regional head of cost and commercial management in the Middle East, said: "With the 2022 FIFA World Cup now confirmed, Qatar could soon emerge as the most expensive place for construction in the Middle East particularly if there is any misalignment between supply and demand in the short to medium term.

"This is likely to be a slow burning process though as whilst ambitious programmes of work are being discussed, it will take a while before construction work actually begins."

The UAE completed the top three of the most expensive countries in the Middle East, with construction costs nine percent cheaper than in Bahrain.

Oman was ranked fourth in the region with construction costs that were 11 percent below the baseline figures set by Bahrain and the UK.

Saudi Arabia emerged as the cheapest country in the Middle East when it comes to construction, finishing 17 places below Oman and in 37th place overall.

The figures revealed that it was almost half as expensive to build in Saudi Arabia as in Bahrain while the kingdom was 37 percent and 34 percent cheaper when compared to Qatar and the UAE.

Smith added: "The Saudi market has traditionally been the most competitive market for contractors, resulting in lower overhead & profit allocations than in the UAE or other GCC countries.

"Furthermore, the abundance of available raw materials and steel factories also play a significant role in keeping construction costs lower, with the price of key commodities like steel and concrete typically 10 percent lower than elsewhere across the region."

The research also noted that inflationary pressures are expected to be very similar in the UAE and Saudi Arabia, although global energy demand could mean inflation is significantly higher in Qatar.

The global report found that overall Switzerland was the most expensive country in which to build with costs over 70 percent higher than in Bahrain and the UK.

Europe dominated the top eight with Australia the only non-European country that made it in to that list.

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