Synchronicity of global construction cost indexes

Abstract

Purpose - The aim of this research 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 CCIs (Construction Cost Indexes) 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: (1) only 22 regions/countries are examined, (2) the distribution of these regions/countries is imbalanced between different continents, and (3) 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.