Common Pitfalls in Construction Cost Estimation and How to Avoid Them

Learn how to avoid the common pitfalls that come with the estimation of construction costs, with the knowledgeable and experienced team from CNJ Construction Consultants.

This blog post will identify typical mistakes made during construction cost estimation and provide practical tips on preventing them. It will offer advice for achieving more precise and dependable cost estimates in construction projects.

Labour costs

Labour is typically the single largest expense in any construction project. It's also the hardest to precisely estimate. The construction estimator must account for the skill, experience, salary, and output of every available worker while calculating labour expenses. 

Estimating how many hours of work go into completing a project is a standard practise. While it's helpful to look at comparable past projects for inspiration, it's important to remember that every task and every team is unique. That’s why construction consultants can often be helpful because their knowledge and experience give you valuable added input when estimating costs.

Building materials

The price of materials is a major factor in the overall construction budget. While looking at past data might be useful, a good construction estimator will also be aware of current market factors that may affect the price and timeliness of supplies. 

In particular, this is true of imports, as the price of imported construction materials is often lower than the price of local construction materials. Embargoes, internal politics, material shortages, rising tariffs, and other factors can all lead to shipping delays, unavailability, and price rises. 

Large construction projects may have lengthy lead times between the first cost estimate and the groundbreaking. It's possible that at that period, the price of materials will skyrocket. If you don't include indirect costs in your bid price estimate, you won't have much of a chance of winning the bid. Construction estimators can do their jobs better if they keep up with developments in relevant industries like lumber and steel.

Risk assessment

The building industry is inherently risky. The degree of risk involved in a construction project should always be considered during the estimate process. Management can use this information to decide whether or not to submit a bid. Winning a job with a high degree of uncertainty may be counterproductive. 

Understanding the level of risk involved is crucial for bidding on the contingencies. The experience and standing of the project's owner, the project's pricing structure (whether it's rigid or flexible), whether the materials used are unique or standard, and if the materials are subject to price changes are all relevant considerations.

Designs and plans

Errors in the design, planning, or specifications can lead to budget overruns. This typically occurs when the design process is hurried so that construction may begin as soon as possible. More problems might arise as a result, suggesting that the design team or construction personnel are inexperienced. 

It is impossible to provide a precise estimate without a complete understanding of the requirements outlined in the designs and specifications. A construction consultant can help to identify errors in design and ensure you don’t move forward before you have a better understanding of the true costs.

At CNJ Construction Consultants, our skilled team can help you avoid the most common errors in the estimation of construction costs so that your project can move ahead smoothly with a clean plan. Contact our team today to find out more.