6 techniques for accurately estimating construction costs

How to estimate construction costs

There are several methods of valuation, each with its own advantages and disadvantages. The three most commonly used methods are:

• Lump Sum Estimation

This method is best for projects with complete plans and details. The contractor will offer a fixed price for the entire project. The project owner can easily compare prices from multiple contractors, but be careful not to underbid the project, as this can affect the quality of the work.

• Labor and materials cost estimation (Cost Plus)

This method is suitable for projects without clear blueprints. The contractor will charge the actual labor and material costs plus a profit. The project owner must closely control the use of materials and labor costs.

• Unit Price Estimation

This method is suitable for jobs that can be divided into smaller units, such as painting or tiling. The contractor will quote a price per unit, and the project owner can calculate the total cost of the job by multiplying the unit price by the number of units.

Factors affecting price

There are many factors that affect the cost of construction work. The main factors include:

• Type of work: Different types of work have different prices. Work that uses expensive materials and labor will naturally be more expensive.
• Size of work: Larger jobs are naturally more expensive than smaller jobs.
• Complexity of the task: Complex work is more expensive than simple work.
• Construction site: Construction work in difficult-to-reach locations will naturally be more expensive.
• Construction period: Projects that take a long time to construct will naturally cost more.
• market price: The market price of construction materials and labor costs will affect the price of construction work.

Example of construction cost

Construction costs vary depending on the factors mentioned above. Examples of approximate construction costs are as follows:

• Home construction: 15,000 - 25,000 baht per square meter
• Commercial building construction: 20,000 - 30,000 baht per square meter
• Factory construction work: 25,000 - 35,000 baht per square meter

Job price estimation techniques

1. Study the average price of construction materials.

Project owners should study the average prices of construction materials on the market, compare prices from multiple stores, and choose to purchase good-quality construction materials at reasonable prices. You'll save even more if you have a personal sales representative who can provide advice and offer project-specific product prices, the kind you can't find in stores or online construction materials stores elsewhere. Interested in having a personal sales representative?

2. Compare prices from multiple contractors.

It is advisable to contact several contractors to request quotes, compare prices, job details, construction timeframes, and payment terms. Choose a contractor with credibility, experience, and a portfolio that meets your needs.

3. Check the quotation carefully.

Before deciding on a contractor, carefully review the quotation. Review the list of construction materials, labor costs, construction period, payment terms, warranty terms, etc.

4. Make a written contract for the contract.

A construction contract is an important document that specifies the details of the work, price, construction period, payment terms, warranty terms, etc. You should read the contract carefully before signing it.

5. Control the use of materials and labor costs.

Project owners should closely control the use of materials and labor costs, and regularly monitor the progress of the work to prevent corruption.

6. Allow for additional expenses

Additional construction costs, approximately 10% of the construction cost, should be allocated to cover unexpected expenses.

It can be summarized like this.

Accurate construction cost assessment is crucial to the success of the project. Project owners should study information, study the median prices of construction materials, compare prices from multiple contractors, carefully examine quotations, draw up written contracts, control the use of materials and labor, and allow for additional costs. This will enable them to assess construction costs effectively.

Note: This article is intended as a guide only for estimating construction costs. Actual construction costs may vary depending on the factors mentioned above.

Resources for construction cost estimation

There are several sources of information that can be used for estimating construction costs, such as:

• Department of Public Works and Town & Country Planning website: https://www.dpt.go.th/
• Website of the Association of Siamese Architects under Royal Patronage: https://asa.or.th/
• Website of the Civil Engineers Association of Thailand: http://www.ceat.or.th/