Synchronicity of global construction cost indexes

Purpose

The purpose of this paper is to examine the features and tendency of cost indices in the global construction setting.

Design/methodology/approach

Data from 22 countries/regions are collected and analyzed using maximum variance formulation and Kendall rank correlation coefficient.

Findings

It is found that global construction cost indexes (CCIs) have commonly maintained a steady increase for decades, and the CCIs synchronize with each other. Overall synchronicity and synchronicity of different countries pairs have increased with time significantly.

Research limitations/implications

The major limitation, however, is the availability of data: only 22 regions/countries are examined, the distribution of these regions/countries is imbalanced between different continents and various indices are adopted around the world, of which statistical methods are not same.

Practical implications

The implication is that a better perception of CCIs enables contractors to have a robust estimation for bidding prices and to improve the efficiency of construction projects management. The research findings also provide a useful reference for those countries that have not established construction cost indices databases to forecast the tendency of domestic construction industries.

Originality/value

This paper contributes to the overall body of knowledge by presenting the co-movement of global CCIs and measuring the changes of CCI synchronicity with time and in different countries pairs.