US vs UK vs Germany construction costs are easy to argue about and hard to compare honestly, because each market reports in a different unit, a different currency, and with different taxes baked in. The cleanest public yardstick is Turner & Townsend's annual survey of city construction markets, which standardizes costs in US dollars per square meter. Its 2026 edition, published July 8, 2026, covers 112 markets in 44 countries and puts New York at the top for the fourth straight year at about $7,937 per square meter, with San Francisco second at $7,883 and London fifth at $6,032, according to Turner & Townsend's own release and a July 16, 2026 summary from the National Roofing Contractors Association.
Convert those to the unit American contractors use and New York works out to roughly $737 per square foot and London to roughly $560 per square foot (1 m² = 10.764 SF). The headline takeaway runs against the usual assumption: by this measure, the most expensive US gateway cities cost more to build in than London, not less.
This piece walks through what the public data actually supports for the three countries, where it runs out, and how to do the unit and currency math without falling into the most common trap.
The Headline Numbers: City Costs Per Square Meter and Per Square Foot
Turner & Townsend's 2026 top ten, as reported by NRCA on July 16, 2026, looks like this. The per-square-foot column is simple division by 10.764 and is our conversion, not the survey's.
| Rank (2026) | City | Avg. cost, US$/m² | Approx. US$/SF |
|---|---|---|---|
| 1 | New York | 7,937 | 737 |
| 2 | San Francisco | 7,883 | 732 |
| 3 | Geneva | 6,985 | 649 |
| 4 | Zurich | 6,917 | 643 |
| 5 | London | 6,032 | 560 |
| 6 | Los Angeles | 5,941 | 552 |
| 7 | Tokyo | 5,801 | 539 |
| 8 | Osaka | 5,539 | 515 |
| 9 | Sapporo | 5,476 | 509 |
| 10 | Chicago | 5,460 | 507 |
Four of the top ten are US cities. London is the only UK market in the list, and no German city appears in it. Because Chicago closes out the top ten at $5,460 per square meter, every German market in the survey sits below that level. The public release does not break out Munich, Berlin or Frankfurt, so we are not going to invent a figure for them; if you need a German city number for a feasibility study, buy the full survey or get a local cost consultant's benchmark.
For context, the 2025 edition (published July 8, 2025, covering 99 markets) had New York at $5,744 per square meter and London at $5,385. NRCA notes that only five markets cleared $5,000 per square meter in 2025, while all ten in the 2026 top ten did. Turner & Townsend says the 2026 survey added 13 new markets, so treat year-to-year comparisons of the dollar figures with care: methodology, market mix and exchange rates all move.
The Conversion Trap
Every transatlantic comparison has to deal with two conversions, and they need to happen in the right order. Using the Federal Reserve's published exchange rates for October 9, 2026 (FRED series DEXUSEU and DEXUSUK), one euro bought $1.1193 and one pound bought $1.3229.
Take a hypothetical German quote of €3,000 per square meter. Multiply by 1.1193 and you get $3,358 per square meter. Divide by 10.764 and you get about $312 per square foot. Skip the area conversion and you will overstate the European cost roughly tenfold. Go the other way, comparing a euro-per-square-meter price against a dollar-per-square-foot price, and you understate the US cost by the same factor.
Two more cautions. First, exchange rates move: a 5% swing in the euro moves your converted number 5% even if nothing on the jobsite changed. Second, check what is in the number. Turner & Townsend's survey is a city-level average across building types; a single project quote for a warehouse and one for a hospital will both sit far from it.
Labor: The Biggest Gap Is Not Where You Expect
Turner & Townsend's 2025 release published hourly construction wage figures by city. New York came in at $131.4 per hour and London at $56.8 per hour, with a US average construction labor cost of $76 per hour. In the 2026 edition, the firm gives regional averages instead: $79.5 per hour in North America and $75.6 in Europe.
Those numbers support one firm conclusion and one caution. The firm conclusion is that the very top of the US market, union labor in New York and San Francisco, pays far more per hour than London. The caution is that the regional averages for North America and Europe are close, which means the "Europe is cheaper because labor is cheaper" story does not hold up across the board. Germany in particular does not show up in the public release as a low-wage market.
Skills shortages are global. Turner & Townsend reported in 2025 that 71 of its 99 markets had a skills shortage and that 87% of North American markets reported shortages in mechanical, electrical and plumbing trades. In 2026 it said more than 70% of markets report skills gaps. For a US view of the same problem, see our breakdown of the construction labor shortage in 2026.
Price Trends: What Each Country's Official Statistics Show
City snapshots tell you the level. Official price indexes tell you the direction. Each country publishes its own, and they measure slightly different things, so compare the direction rather than the exact decimals.
Germany. The Federal Statistical Office (Destatis) reported, in its August 2026 release summarized by Baulinks on October 9, 2026, that prices for new conventional residential buildings were 5.5% higher than in August 2025. New office buildings rose 5.7%, commercial operating buildings 5.5%, and road construction 6.9%. Within residential work, roofing was up 7.6% and electrical, security and IT systems 7.2%. Destatis notes that these prices include VAT.
United States. The Bureau of Labor Statistics producer price indexes for builders, pulled from FRED, show the year to September 2026: new office building construction up 6.0% (PCU236223236223), new industrial building construction up 5.7% (PCU236211236211), new school building construction up 5.2% (PCU236222236222), and new warehouse building construction up 4.5% (PCU236221236221). These are prices contractors charge for the finished work, which makes them a reasonable counterpart to the Destatis series.
United Kingdom and global. Turner & Townsend's 2025 release forecast 3.0% construction cost inflation for London in 2025. Globally, the firm's 2026 release expects construction inflation to rise from 4.2% in 2025 to 4.5% in 2026 and then stay broadly flat in 2027.
The short version: German and US building prices are both rising in the 4.5% to 6% range year over year in the most recent official data, which means neither side of the Atlantic is getting a break right now.
Taxes: VAT Changes the Comparison More Than People Think
Tax treatment is where many US-versus-Europe comparisons go wrong, because the figures are rarely on the same basis.
In the UK, the standard VAT rate is 20%, according to HMRC guidance on GOV.UK, and it has been at that level since January 4, 2011. Construction of new dwellings is zero-rated, and renovating a dwelling that has been empty for at least two years, or converting premises to add dwellings, can qualify for the reduced 5% rate, subject to conditions.
In Germany, the standard VAT rate is 19%, with a reduced rate of 7% for certain items, according to PwC's Worldwide Tax Summaries (last reviewed June 30, 2026). Germany also charges real estate transfer tax that ranges from 3.5% in Bavaria to 6.5% in several states.
In the US there is no VAT. Sales tax on materials varies by state, and the treatment of construction labor varies as well, so check your own state's rules rather than relying on a national number.
Registered businesses in the UK and Germany can generally recover VAT on commercial projects, so for a developer building offices the tax may wash out. For a homeowner renovating, it often does not. The practical rule: before you compare a European price to a US one, find out whether the European number includes VAT. The Destatis index above does; many contractor quotes do not.
Permitting and Process: Different Systems, Different Risks
There is no single official statistic that compares approval times across the three countries on the same basis, so this section sticks to how the systems are structured rather than claiming specific timelines.
- UK. Most significant development needs discretionary planning permission from a local planning authority, and larger schemes typically negotiate planning obligations with the council. The discretionary step is where schedule risk concentrates.
- Germany. Building permits (Baugenehmigung) are issued under state building codes. The process is rule-based: a project that complies with zoning and code requirements is generally entitled to approval, which makes outcomes more predictable even when reviews are thorough.
- US. Approval depends heavily on the jurisdiction. Where zoning allows a use by right, a project can move straight to plan review; where it needs a rezoning, variance or discretionary review, timelines and outcomes become much harder to predict.
For bidding purposes, the lesson is that schedule risk is priced differently in each system. A long, uncertain approval period adds carrying cost and escalation exposure, and with official price indexes running around 5% a year in both Germany and the US, every extra quarter of delay matters.
What This Means If You're Bidding Across Borders
US contractors looking at European work, or European firms looking at the US, should not carry home-market margin assumptions across the Atlantic. For a US baseline, CFMA's 2025 Financial Benchmarker reported a 6.7% pre-tax net income margin for the typical responding US contractor in fiscal 2024; our construction profit margins analysis covers what sits behind that number. Comparable public figures for UK and German contractors are not in the sources used here, so get local data before you price.
If you want a domestic baseline before comparing abroad, our US commercial cost-per-SF breakdown covers building types in detail, and our look at data center construction costs per square foot covers the asset class where cross-border comparisons come up most often. Run your own numbers through the cost estimator and stress-test markup with the markup and margin calculator.
Frequently Asked Questions
Is it cheaper to build in the US or Europe?
It depends on the city. In Turner & Townsend's 2026 survey, New York ($7,937 per m²) and San Francisco ($7,883 per m²) were the two most expensive markets in the world, ahead of Geneva, Zurich and London ($6,032 per m²). No German city made the top ten, which was capped by Chicago at $5,460 per m². The public release does not give costs for lower-cost US metros, so a Sunbelt-versus-Germany comparison needs the full survey or local data.
How much does it cost to build in London compared with New York?
Turner & Townsend's 2026 survey puts London at about $6,032 per square meter, or roughly $560 per square foot, versus New York at about $7,937 per square meter, or roughly $737 per square foot. In the 2025 edition the figures were $5,385 and $5,744 per square meter respectively.
Why do German construction prices keep rising?
Destatis reported that new residential building prices in Germany were 5.5% higher in August 2026 than a year earlier, with roofing up 7.6% and electrical and IT systems up 7.2%. Office building prices rose 5.7%. These figures include VAT. US producer prices for new office building construction rose 6.0% in the year to September 2026, so the trend is similar on both sides of the Atlantic.
How do you convert cost per square meter to cost per square foot?
Convert the currency first, then divide by 10.764. Using the Federal Reserve's October 9, 2026 rate of $1.1193 per euro, €3,000 per m² becomes $3,358 per m², which is about $312 per square foot. Forgetting the area step overstates European costs about tenfold.
What VAT applies to construction in the UK and Germany?
The UK standard VAT rate is 20%, with new dwellings zero-rated and certain renovations and conversions eligible for 5%, according to GOV.UK. Germany's standard VAT rate is 19%, with a 7% reduced rate for certain items, according to PwC's tax summaries. The US has no VAT; state sales tax rules apply instead.
Are construction labor costs higher in the US or Europe?
At the top end, yes, the US is higher: Turner & Townsend's 2025 survey put New York construction wages at $131.4 per hour versus $56.8 in London. On average the gap is narrower; the 2026 edition puts the North American average at $79.5 per hour and the European average at $75.6.
Your Action Item for This Week
Take your last completed project, express its cost in both dollars per square foot and the local currency per square meter, and write down whether the figure includes tax. Then compare it against the Turner & Townsend city figures above and the latest official price index for your market. If you are a US contractor, you will have a defensible answer the next time a client cites a European cost figure. If you build in the UK or Germany, you will know how much of a US comparison is tax treatment and unit conversion rather than real cost.
Sources: Turner & Townsend, Global Construction Market Intelligence 2026 (July 8, 2026) and 2025 release (July 8, 2025); NRCA summary of the 2026 survey (July 16, 2026); Destatis construction price data for August 2026 via Baulinks (October 9, 2026); BLS producer price indexes via FRED (September 2026); Federal Reserve exchange rates via FRED (October 9, 2026); GOV.UK VAT rates guidance; PwC Worldwide Tax Summaries, Germany (reviewed June 30, 2026); CFMA 2025 Financial Benchmarker via ENR (September 29, 2025).
