Using up-to-Date Construction Cost Data

construction cost data

As we get older, it’s difficult to transition from some of the basic business principles and construction cost data we followed from other decades. They worked, time and again. Many of them aren’t working now. 

If you’re estimating costs using the same formula your company used in 2019, it’s just like assuming you can get a pumpkin-flavored coffee from a snow cone vendor in January for twenty-five cents. You’re using the wrong seasonal considerations and outdated pricing.

3 Reasons to Update Construction Cost Data

We wanted information fast and we got it. Now, we need to keep up with it or we’ll make costly mistakes. In a tight market, that’s exactly what we can’t afford.

Here are 3 reasons to upgrade your construction cost data:

1. If your construction cost data is out-of-date, your estimates will be off. Incremental changes are expected but they should be included in construction cost data sooner rather than later. When we ignore them, incremental changes can add up. The damage can be significant.

2. Inaccurate estimates based on out-of-date construction cost data leads to cost overruns. “Cost overruns can shut down a project altogether,” says construction technology company Gordian*. “From 2020-2021, 57% of construction material costs increased.” Multiply a material cost increase by the number of times you will order that material and you can see projects will realize lower profits.

3. Underestimating costs reduces your credibility. And that can negatively impact customer and contractor relationships. Accurate construction cost data is essential to your brand, from planning through delivery.

Construction Business Data Analytics

Consider the numerous political, global, and technological changes within the past 12 months. That’s why any long-term business plan is no longer realistic.

Robert Snow Means was a civil engineer who kept detailed tracking records for construction equipment, materials, and labor costs. He became a go-to for construction cost data in the 1940s. Gordian offers aptly named RSMeans construction cost data analytics as well as other technological services to the construction industry.

Construction Monitor data analytics are renewed every week. We provide you with customized, geographically relevant data that can influence business decisions and drive marketing strategies for your company.

Contact us today to develop the dataset that will best serve you.

*Construction Monitor does not endorse nor recommend any software solutions, companies, or brands (except our own).

Construction Cost Management: The Challenges are Real

Construction Cost Management

In 2015, KPMG revealed only 31% of construction projects came within 10 percent of the budget. Five years ago may seem like another lifetime, but it’s not. With pandemic-related cutbacks, the challenges of construction cost management loom larger than life.

Post-Pandemic Construction Cost Management

Rather than cut back, consider how to move forward.
Steve Coughran, business strategy professional

Some of us weren’t managing our businesses that well before the pandemic, so it didn’t take much to topple an already shaky tower. Among the construction cost management challenges we face are:

  • Documentation – Multiple change orders and complex approval process
    • Minimize mistakes with a connected platform (see: “software”). Teams enter costs in real-time and the change orders’ approval processes are easily tracked.
  • Financial health – Lack of real-time view and/or inability to see historical construction cost management changes
    • Implement an integrated cost management solution (see: “software”) that gives everyone real-time views of project costs. Online paper trails are easier to track.
  • Multiple projects/contracts – Tracking ways every expense impacts the overall financial structure of each project
    • Manage subcontractors on a cloud platform (see: “software”). Teams can view real-time entries, edits, and contracts in one location for effective construction cost management.

Cutting Costs

Categorize every expense as “avoidable” or “unavoidable.” Avoidable expenses will not directly impact your customer and are not fundamental to operations.

When you can cut specific expenses that will save money now, those are opportunity costs. But beware: Canceling employee training now will save money but can have negative consequences later.

It could impact employee retention; something that is a factor in quality-of-work deliverables. Companies showing current training and certification documentation can have an edge over lower-bidding companies.

Construction Monitor: Software Analytics for Real-Time Leads

Construction cost management begins before the bid. Post-pandemic business managers are working smarter and using technology to save time and money.

That’s what we do for you. We provide customized data analytics – sorted – to meet your business needs. The basic information is free if you know where to look. But you can spend a lot of time breaking down that “free” information. By the time you’ve figured out what you need, an opportunity may be history.

Your time is better spent making money. You can make profitable business decisions faster with weekly datasorts that target your specific U.S. region and your market. Ask us how it works. Contact Construction Monitor today.