🕑 Reading time: 1 minuteVarious factors influence the cost estimation of a construction project. Preparation of a construction cost estimate for any project is a very complex process which consists of many variable factors. Every variable has to be correctly estimated based on proper study, past experience and research to calculate total project cost of construction.
- Factors Affecting Construction Cost Estimation
- 1. Similar Construction Projects
- 2. Construction Material Costs
- 3. Labor Wage Rates
- 4. Construction Site Conditions
- 5. Inflation Factor
- 6. Project Schedule
- 7. Quality of Plans & Specifications
- 8. Reputation of Engineer
- 9. Regulatory Requirements
- 10. Insurance Requirements
- 11. Size and Type of Construction Project
- 12. Location of Construction
- 13. Engineering Review
- 14. Contingency
Factors Affecting Construction Cost EstimationThere are many factors which affect the construction cost estimate and have significant impact on project cost and they are as following:
1. Similar Construction ProjectsFor the construction estimate, the best reference will be similar construction projects. The final cost of those similar projects can give the idea for the new construction project cost calculation. The final cost of past project needs to be factored with current construction cost indices.
2. Construction Material CostsConstruction material cost consists of material cost, shipping charges and taxes applicable if any. So, it is important consider all these variations while calculating construction material cost.
3. Labor Wage RatesLabor wages varies place to place. So, local wage rate should be considered in calculation. If the project has to be started after several months of estimating the project cost, the probable variation in wage rates has to be considered in the calculation.
4. Construction Site ConditionsProject site conditions can increase construction costs. Site conditions such as poor soil conditions, wetlands, contaminated materials, conflicting utilities (buried pipe, cables, overhead lines, etc.), environmentally sensitive area, ground water, river or stream crossings, heavy traffic, buried storage tanks, archaeological sites, endangered species habitat and similar existing conditions etc. can increase the project cost during construction phase if these variations are not considered during estimation.