Construction consultancy experts reveal importance of cost estimation accuracy

Paul Eyers
By Paul Eyers
4 Min Read

Whether on the job site or in the office, you can’t build a successful construction company without paying close attention to numbers.

And when it comes to trade businesses, no figures are more important than cost estimates.

Having trustworthy estimates is the most crucial aspect of any construction project, with accurate costing essential to ensure profitability.

However, good cost estimations face many hurdles, as price fluctuations, unique building components, and uncertain labour costs provide an ever-present level of volatility and risk.

No business can afford inaccurate estimates to end up costing them money, so it’s essential to use the most accurate and trusted guidance possible when constructing cost estimates.

Yet despite being one of the most essential parts of running a successful business, many tradies and construction companies still take shortcuts when estimating, losing money, time and trust as they fall behind the competition.

Build-it spoke with cost consultancy experts Rawlinson’s Cost Management, Australia’s oldest quantity surveying firm, who revealed the importance of seeking reliable data to construct cost estimations.

Material costs:

While most construction firms have a good grasp on their estimated material costs, lingering post-COVID fluctuations and delays in the supply and demand of certain materials mean some estimates can reduce accuracy by the time construction commences.

That’s why it’s essential to refer to comprehensive cost estimation data such as Rawlinson’s 2024 Australian Construction Handbook and Cost Guide to provide the most trusted and up-to-date material estimates.

Rawlinson’s cost data includes quarterly updates, forecasts, price fluctuations, exclusive market insights and historical indices for each state and territory.

This level of detail has allowed their up-to-date guides to become a renowned source of reliability all year round.

Labour costs:

With many variables and elements, labour costs are often the most challenging aspect of any cost estimation.

Wages, payroll taxes, and benefits are just some of the responsibilities business managers have to consider when estimating project costs.

While some construction companies choose to guess their labour cost calculations, industry leaders use detailed data to provide accurate labour estimates.

Rawlinson’s 2024 Australian Construction Handbook helps make that process simple by providing quarterly updated labour rates, labour constants, trade ratios, haulage rates, and plant hire rates individualised for each state and territory.

Whether for initial project feasibility studies, cost benchmarking, ECI elemental cost estimates, value engineering, BOQ pricing or variation assessments, their 1000-page handbook is the ultimate headstart for contractors and subcontractors.

Risk assessments:

Assessing potential problems before they can even arise is a great way to ensure projects stay as cost-effective and timely as possible, even when things don’t go as planned.

Creating contingency plans and having estimates for possible setbacks will ensure things run smoothly and help mitigate any issues.

Rawlinsons 2024 Australian Construction Handbook and Cost Guide include costing data for 30 different trades and an elemental breakdown for 170 different building types, including commercial, domestic, building renovations, and recycling of existing buildings.

So when problems arise, Rawlinson’s data can give you confidence in how much it will cost to solve them.

Ensuring your cost estimation is guided by a comprehensive database with a proven track record can ensure you won’t overestimate and underestimate various cost elements, allowing your business to remain profitable and your customers to keep confidence in your services.

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Paul Eyers has worked as a journalist for a range of media publishers including News Corp and Network Ten. He has also worked outside of Australia, including time spent with ABS-CBN in the Philippines. Stepping away from the media, Paul spent five years sharpening his tools in construction - building his skill set and expertise within the trade industry. His diverse experiences and unique journey have equipped him with an insider view of Australia’s construction game to dig deep into the big stories.