Inflation overseas in 2002 proved more stubborn than many estimators thought it would be. A year ago, fear of a deep recession in the U.S. led many to believe that inflation would fall dramatically. That didn't happen, but worldwide construction inflation weakened for the second consecutive year and should decline again in 2003, according to a forecast by Gardiner & Theobald Inc.
In its eleventh annual survey of international construction costs, conducted exclusively for ENR, the London-based international project and cost management firm reports that construction inflation averaged 3.2% for 22 nations in Europe, Asia and the Middle East. This is down from a 3.7% annual inflation rate in 2001 and 4.4% in 2000 for the same group of countries. Next year, construction inflation should slip another 0.3%, according to respondents providing forecast data.