APAC Office Fit Out Cost Guide

SUPPLY CHAIN STRESS BACK ON THE RISE

RAW MATERIALS

RAW MATERIAL PRICING INDEX (December 2019 = 100)

LOOKING TO GO BEYOND MARKET AVERAGES and understand costs based on your unique construction requirements?

Although pricing pressure remain volatile, the positive news is that the cost of raw materials has continued to decline over the past year. The steepest decline has been in energy pricing, down 24% y-o-y, though both metal and minerals, and Brent Crude Oil are both down around 5% y-o-y. In total, raw material pricing has eased by up to 40% from the peaks seen in early 2022. However, conflict in Europe has not only reduced trade flows but also triggered the re-routing of vessels away from the Suez Canal and via the Cape of Good Hope instead – adding approximately 6,000km in distance and 10-14 days in time. At the same time, drought in the Panama Canal has caused a 36% reduction in transits y-o-y. Consequently, supply chain stress is starting to increase once again. Reduced capacity and longer transit times have caused container spot pricing to quadruple (Shanghai-Rotterdam) since October 2023. While the duration of these impacts remains unknown, the twin risks of reduced product availability and inflationary price pressures returning have become elevated. SUPPLY CHAIN STRESS SHIPPING COSTS

100 120 140 160 180 200 220

20 40 60 80

REACH OUT NOW

Metals & minerals

Timber

Energy

Oil

Source: The World Bank; Cushman & Wakefield

TO ENGAGE ONE OF OUR EXPERTS.

SUPPLY CHAIN STRESS INDEX (100 = pre-pandemic normal)

60 70 80 90 100 110 120 130 140 150 160

More stressed than pre-pandemic normal

Less stressed than pre-pandemic normal

Mainland China

United States

Source: Moody’s Analytics; Cushman & Wakefield

CONTAINER SPOT RATES (USD per 40-ft container)

6,000

5,000

4,000

3,000

2,000

1,000

0

Jan-23

Mar-23

Jun-23

Aug-23

Oct-23

Jan-24

World Container Index

Shanghai to Rotterdam

Source: Drewry; Cushman & Wakefield

6

Cushman & Wakefield