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US Tops List of World’s Most Expensive Cities to Build In

New York ranks highest globally for construction costs.

Updated on

July 30, 2025

construction workers — Workers at a construction site. (Photo: Courtesy)

Five US cities have been listed among the world’s ten most expensive places to build in, as labour shortages, inflation, and shifting global priorities continue to drive up costs.

According to a new report by Turner & Townsend, New York tops the global list of the most expensive cities in the world for construction, with San Francisco coming second.

Zurich, Switzerland, is the only European city in the top three.

Other US cities in the top ten include Los Angeles (6th), Chicago (7th), and Philadelphia (9th), underscoring the country’s growing difficulties in managing building costs.

The report attributes these high prices in the US to a combination of elevated wages and a severe shortage of skilled workers. On average, construction workers in the United States earn approximately $76 per hour, with rates in New York reaching as high as $131.40.

The shortage is particularly acute in specialised trades.

A significant 87% of North American markets reported lacking mechanical, engineering, and plumbing professionals, adding pressure on timelines and budgets.

This is part of a wider global trend.

Across the 99 markets surveyed, more than 70 are grappling with similar skills gaps, which are keeping construction inflation above long-term targets. Turner & Townsend forecasts global construction inflation will average 3.8% in 2025 and 4% in 2026.

Elsewhere, Western Europe and the UK are also seeing construction costs remain high. Analysts link this to strong demand, as governments prioritise industrial growth and defence capacity, and global investors seek the relative political and economic stability of the region.

“Geopolitical tensions and increasing polarisation are changing where and how investment flows. However, while uncertainty is limiting confidence in some regions, it is creating opportunities in others,” said Neil Bullen, a director at Turner & Townsend.

He added: “Whether businesses are making tactical moves to reorient supply chains, or pivot to invest in high-growth sectors like defence, advanced manufacturing and data centres – construction remains crucial to global resilience and growth.”

Meanwhile, the skills shortage poses a significant threat to the sector’s momentum.

“We’re seeing a worldwide skills shortage that could put the brakes on growth. International labour could become less mobile as barriers to migration emerge, further adding to the long-term dwindling of talent pools,” Bullen warned.

With demand likely to remain strong and talent hard to find, the world’s most expensive cities to build in may continue to see rising costs well into the future.