Why Is Estimating Important in Construction?

March 10, 2024

In construction, identifying if a client’s spending cap is enough to turn their vision into reality can only be accomplished with an accurate and well-researched estimation. Estimating is considered one of the most important phases in project preparation as it has a direct impact on all processes that follow it.

Creating a quality cost estimate requires an estimator to evaluate many different aspects of a project, from materials and equipment to labor requirements. This includes determining quantities, pricing all materials (including the price of any special order items) using historical data and vendor quotes, and assessing the labor requirements and cost of all roles to complete a specific task (ie. rough-in plumbing, window installation). The estimator also needs to create work packages that include each aspect of the project and assure no items or costs are overlooked.

A quality estimate will also include a margin for profit and contingencies to cover unforeseen circumstances that regularly arise during construction projects. Contingency numbers vary widely across the industry as each business considers growth goals, market conditions and more when calculating this margin.

Having an efficient and robust estimating process is critical for a construction company’s profitability. Without the ability to accurately predict project costs and ensure that they are within budget, a construction company can lose money. Estimating software can help improve the accuracy of estimates by automating measurement calculations and providing digital takeoff capabilities, while also allowing the ability to easily update quantities and costs as a project progresses.

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