Currency fluctuations helped push San Francisco and New York City off the list of the five most costly cities in which to build in 2020, according to an annual review of world construction by engineer Arcadis.

The issue of cost is important as virus-slammed local and national economies plan to build their way back to growth following lockdowns, says Andrew Beard, global head of cost and commercial management for the Netherlands-based firm.

"With modest levels of inflation and some spare capacity, construction industries in most countries are well positioned to make their contribution to recovery," he writes.

Monetary policy had more influence on comparative global construction costs than the rising cost of materials, Arcadis explains.

As the U.S. Federal Reserve continued to keep interest rates from rising, the low rates tamped down the value of the U.S. dollar in international currency trading. That in turn decreases the comparative cost of building in the U.S. At the same time, building costs kept rising in most American cities.

For example, the European cities of Geneva, London, Copenhagen, Oslo and Zurich were the top five most expensive cities to build in, with costs up 1-2%, reports Arcadis.

New York City and San Francisco, the next two most expensive construction markets, had been in the top five last year. While now less costly compared to the European cities, those U.S. cities saw cost increases of 2% to 5% and still in the top 10 most expensive in the world,

The world's least costly cities, among those surveyed by Arcadis, are Mumbai, New Delhi and Bengaluru—all in India.

Around the world, construction proved one of the most resilient industries in value of work performed, writes Arcadis. In Australia, construction "emerged from the pandemic relatively unscathed," with an overall decrease in activity of about 1.6%, its analysis says. Construction in the U.K., however, was down 13% in 2020.

Meanwhile, as construction output in China actually increased by 6%, costs rose 5% in the city of Wuhan, now famous for its role as first to be hit by the worldwide virus.