Title

Convergence of construction costs in the single European market

Date of this Version

2009

Document Type

Conference Proceeding

Publication Details

Interim status: Citation only.

Langston, C., & Best, R. (2009). Convergence of construction costs in the single European market. Paper presented at Managing IT in construction/Managing construction for tomorrow. Proceedings of the 26th international conference on IT in construction & 1st international conference on managing construction for tomorrow, Istanbul, Turkey.

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2009 HERDC submission. FoR Code: 1299

© Copyright 2010 Taylor & Francis Group, London.

ISBN

978-0-415-56744-2 (hbk); 978-0-203-85978-0 (eBook)

Abstract

Several studies have shown evidence of price convergence between countries in the European Union (EU) since the establishment of the single market and the adoption of the euro by around half the countries as their single currency. In this study average construction costs for two building types in two groups of EU countries, one using the euro, the other using their individual national currencies, were gathered. These costs were converted to euros where necessary using two kinds of purchasing power parities, adjusted for inflation and brought to a common base date. The dispersion of these costs was analysed using the coefficient of variation. The results show little evidence of price convergence for non-residential construction for either country group. This is shown to be in contrast with convergence that is evident in the prices of other product groups. The results raise the question of why construction prices in the EU appear to be resistant to convergence even in the group of countries that share a single market and a single currency.

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This document has been peer reviewed.