Key Factors That Affect Construction Cost Estimates

The role of the construction estimating factors in determining the accuracy and reliability of the construction cost estimate is significant. Small changes in factors make bigger changes in the cost of the project. The assumption that estimates are simple calculations is wrong because they have much detailed work attached to them. From the size of the project to the material and labor costs, everything is calculated with precision. The material quantity and its cost are the various factors that affect the cost. Understanding these factors will help you understand where so much money in a construction project is spent. 

Estimation is not a basic process that anyone can do. It involves several steps, such as material takeoff. This one step in itself is so detail-requiring because each material has to be identified for listing. So people hire Construction Cost Estimating Services to ease their job. As the professionals do the job, you do not have to worry much. But knowing ensures that you know what's going on, and you do not get scammed.    

The Key Factors

1. Size and Scope of Project

This defines the type of the project and its size, such as a residential project being relatively smaller than an industrial project. Or in a small project, sometimes the design can be complicated. So it entirely depends on the project. And depending on the project, the price changes. An industrial project is superior to others when it comes to strength so we can say it is the most expensive one.

2. Drawings and Specifications for Construction

If you want an accurate estimate, first you need detailed drawings. If the drawings are incomplete or unclear, there can be mistakes with the material takeoff. The basis of a good estimation is a good material takeoff. And if it is not detailed, it means the estimate will be inaccurate. People are advised to hire Construction Takeoff Services in this phase. It is always better if a professional does this because they do it with greater precision. This shows the importance of good drawings and specifications. Shortly, clear drawings help with:

• Accurate material takeoff

• Correct labor calculations

• Fewer surprises during construction  

3. Material Costs and Availability

Material cost is a very fluctuating factor because sometimes an estimate is derived on the basis of the cost of a certain time. And during construction, the material costs increase for some reason, which changes the estimate. The second thing is the transportation cost. The cost of material also increases or decreases depending on how far the seller is from the construction site. This is why good estimators consider the factors like

• Current market rates

• Delivery cost 

• Material shortages 

4. Labor Rates and Productivity

Labor makes up a large part of the construction cost. And it is mostly because labor is hired in large numbers. And it is not an expense that happens once, like buying materials. Labor has to work through every part of the project, so it becomes a large expense at the end. Labor rates vary depending on 

• Location

• Skills level

• Project complexity 

5. Condition and Location of Site

Site-related factors are important to manage and they also cost a lot. Poor soil condition or other problems have to be sorted because it is a piece of land and construction has to be done. It does not happen with everyone but if it does happen, the construction cost increases. If the site you are working on is in urban area, then you might require

• Special permits to work there

• Traffic management 

• Restricted working hours 

6. Construction Method and Schedule

Construction can be done in different ways, such as laying a foundation, which has different types. Each type takes a different amount of time and its material and labor requirements are different. Having the assistance of an Estimating Company means you do not need to worry about the budget management. They will see your plan and make a budget according to that and also divide it among the sections of the project. 

7. Contingencies

Good planning can reduce the uncertainties in construction but completely excluding them can be impossible. So, to be on the safe side, it is advised to keep almost ten percent of the total cost aside for this purpose. It means if a problem occurs, you do not have to worry about money all of a sudden because you planned it in advance. 

8. Market Conditions

A good estimator keeps the market conditions in consideration while calculating the estimate. And even try to predict and manage this change in the budget. Market conditions change and influence 

• Contractor availability

• Supplier pricing

Conclusion

Construction cost estimates are influenced by many factors. From project scope to getting permits, all of these are factors that change and can change the cost of the project. By understanding the estimating factors, one can understand how the construction project price can fluctuate in real life. And you can also plan your project accordingly and prepare your mind about how you are going to deal with this issue if it happens.