India’s construction market continues to show resilience, underpinned by sustained infrastructure investment, rapid urbanisation, and steady demand from industrial and commercial sectors. However, capacity constraints and shifting market dynamics are placing growing pressure on project costs and delivery timelines.
Cost trends across the sector are increasingly influenced by labour availability, energy price volatility, evolving compliance requirements, and persistent supply chain uncertainty, compounded by broader geopolitical developments. At the same time, the industry is accelerating its shift toward sustainable construction practices, higher digital adoption, and faster delivery models—making early-stage planning, procurement strategy, and proactive risk management critical for clients and stakeholders.
Satyakumar Shetty, COO India, Currie & Brown, said: “India remains one of the world’s busiest and most competitive construction markets, but the factors influencing costs are changing quickly. Cost increases are no longer driven by materials alone; they are being shaped by labor availability, fluctuating energy prices, evolving regulations, and broader geopolitical uncertainty. For clients, this underlines the importance of having clear cost insight and planning to safeguard project delivery and achieve lasting value.”
The global outlook
Across most countries, construction costs are forecast to rise between 2 per cent and 6 per cent, supported by steady demand from infrastructure, healthcare, technology, and industrial sectors. However, a small number of markets are expected to deviate from this trend.
In China, construction costs are projected to remain flat, pulling down the global average. Japan stands at the other end of the spectrum, where escalation could reach between 10 per cent and 12 per cent, driven by acute labour shortages and sustained material pressures. These outliers underline how strongly local market conditions can influence cost behaviour.
Despite moderate cost growth in many regions, the delivery environment remains complex. Labour shortages, shifting trade tariffs, supply chain disruptions, energy price volatility, climate-related events, conflict, and policy changes are increasingly interconnected—meaning disruption in one area can rapidly trigger challenges elsewhere.
Alan Manuel, Group Chief Executive Officer, Currie & Brown, said: “In 2026, we’re predicting moderate cost escalation across most markets. But the real challenge comes from how quickly this picture can change. This volatile environment means that resilience is more important than ever. And that resilience comes from planning for change early. That means using data to test options, using technology to spot pressure sooner, and being clear about what must be fixed and what needs to stay flexible.”
Certainty comes from agility
Looking ahead to 2026, the organisations best positioned to succeed will be those that act early, understand where pressure points are likely to emerge, and maintain flexibility where it matters most.
With uncertainty rising despite moderate cost escalation across most markets, the challenge is shifting away from predicting exact market movements and toward maintaining control as conditions evolve. In this environment, certainty is increasingly driven by agility.
How organisations can deliver with confidence in 2026
The report outlines several practical steps organisations can take to stay in control and mitigate cost risk, even in volatile conditions:
— Set a realistic starting point early. Use current market data to test cost, programme, and risk assumptions against real conditions and comparable projects.
— Plan for a small number of outcomes. Assess a few credible scenarios, then determine what should be locked in early and where flexibility must be retained.
— Check labour and market capacity by location and phase. Where skills or resources are constrained, adjust scope, sequencing, or procurement strategies before plans are finalised.
— Make key decisions sooner. Early confirmation of phasing, requirements, and long-lead items can significantly reduce future exposure.
— Use technology to spot pressure earlier. Focus on tools that enhance visibility, shorten decision cycles, and enable faster, clearer decision-making.
As cost pressures evolve and uncertainty becomes the new constant, the ability to plan early, stay flexible, and respond quickly is emerging as a decisive advantage for construction stakeholders worldwide.