International comparisons of cost and productivity in construction: A bad example

Rick Best*

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

17 Citations (Scopus)
140 Downloads (Pure)


In a report published in June 2012 the Business Council of Australia (BCA) reported that it costs considerably more to build a variety of types of infrastructure in Australia than it does in the US. Airports (90 per cent more costly) and hospitals (62 per cent) were quoted as the worst cases with other projects ranging from 26 to 43 per cent more. They used these figures to conclude that Australia is a high cost, low productivity environment for building infrastructure projects. These claims were based on cost/m 2 figures published by a major international construction consultancy. The method used by the BCA is flawed in two ways: one is the in the use of costs that are recognised as giving only the broadest of indications of probable costs and the second is the use of exchange rates to convert Australian construction costs to US dollars. Careful analysis of the methodology used, supported by a series of other comparisons based on other data sources and other conversion factors (purchasing power parities or PPPs), suggests that in real terms it probably costs no more to build in Australia than it does in the US and that it may well be cheaper to build in Australia than it is in the US.

Original languageEnglish
Pages (from-to)82-88
Number of pages7
JournalAustralasian Journal of Construction Economics and Building
Issue number3
Publication statusPublished - 2012


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