# Japan Falls Three Places to 29th of 33, Costliest Construction Labor of the Field Once Output Is Counted
SAN ANTONIO, Texas — September 3, 2026 — Japan closed 2025 ranked 29th of 33 economies in Intratec's Industry Economics & Competitiveness 2025 Annual Review, published today, three places lower than a year earlier. Once output per worker is counted, no country of the 33 pays more for construction labor than Japan, a position it has held for seven straight years.
Construction labor cost, output counted, 2025
The review compares 33 economies on the same basis across 14 pillars — among them manufacturing and construction labor costs, industrial energy prices, taxation and market access — with findings drawn across 7 industries.
The fall is a cost story, and it starts on the building site. A new plant in Japan costs 1.16 times what the same plant costs in the United States, and construction labor ranks last of the 33 once output per worker is counted. Those two lines together put Japan among the priciest places the review tracks to build a plant from scratch.
Staffing the finished plant is expensive as well, without being extreme. Manufacturing labor costs $32.3 an hour as paid, above the 33-country average of $26.0, in a field that runs from $1.6 an hour in Indonesia to $57.1 in Belgium; Canada pays $38.7 and the United Kingdom $40.4. Industrial energy sits near the middle at $25.7 per MMBtu, the same price Mexico pays, against a 33-country average of $24.0. The employer payroll charge is 16% of wages, under the 18.2% average — the cheapest part of an otherwise expensive cost base.
> "Adjusted for output per worker, an hour of construction labor in Japan costs $77.2 — more than in any of the 33 countries we track. That is half again the US price, and more than double Japan's own 2015 level. Japan has been last on this measure for seven straight years."
>
> — Alexandre Carvalho, Analyst, Industry Economics & Competitiveness
What sits underneath that cost base is a large, well-connected industry. Domestic market size and industrial production both rank 5th of 33, logistics and infrastructure 6th, the domestic tax environment 9th, commodity prices 10th and macroeconomic stability 11th. Trade access is where Japan gives ground: freight costs rank 29th, tariff access 30th, and processing margins sit in the lower third at 25th. What holds the country at 29th is not what it can make; it is what it costs to build there and to staff the build.
The field moved around it. Japan scored 47.6, up 0.1% on the year, and fell three places anyway: ranks 8 through 33 sit inside a 4.4-point band, so a small score move shifts several places. China closed 2025 on top for an eleventh straight year and the top five held their exact 2024 positions, with movement beginning at 6th, where Singapore and the Philippines traded places. Finland climbed five, the largest gain in the field, and Brazil fell five. Japan is the only Asia-Pacific country in the global bottom five.
The Industry Economics & Competitiveness 2025 Annual Review is free to read, and its methodology is open.
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