Construction Cost Estimation

Approximate Estimate Of Construction Cost

Thursday, June 29, 2017

Use of Approximate Estimates

The only safe and sure way of estimating construction costs is to take out quantities of works under the different items and  multiply these quantities by the prevailing unit rates at the geographical location of the construction project. e- S T M 8 Software provides an essential platform for such detailed construction cost estimating, in addition to having an Invoicing Add-on that enables Interim Applications for  Payment by Contractors using the style of the standard A.I.A forms, namely G702, G703

However, this can be done only when drawings, specifications, and bill of quantities have been prepared and made available to the contractor.

When accurate cost of construction is not yet required and a rough idea is sought at some stage to help decision makers decide whether to proceed or not, approximate estimates of construction cost are used and we recommend the on-line tool provided on our web site www.misronet.com, for this purpose. The accuracy of cost estimated by approximate methods depends on the judgment, skill, and experience of the estimator and upon the correctness of the prices used.

The approximate cost estimating methods are used to serve either of the following purposes:

  1. To give a rough idea of the probable expenditure: At the early stages of the development of a project it is necessary to ensure whether the project can be financed. A rough idea of the probable expenditure has to be obtained and if this appears feasible, then further details may be considered.
  2. Administrative approval: In the case of government and other public works, proper sanction has to be obtained for allocating the expenditure required for the detailed investigations and preparation of plans and estimates. This sanction is given based on approximate cost estimating method.
  3. Valuation and rent fixation: Sometimes it is required to estimate the cost of an existing structure, for one or more of the following reasons: for sale or purchase, for rent fixing, for framing tax schedules, or for insurance requirement. In these cases the approximate methods are adopted.

Approximate methods of estimating building construction costs

There are six commonly used methods for estimating the approximate cost of buildings. They are stated below in ascending order of accuracy degree

  1. Service unit

  2. Square meter of floor area (Adopted by www.misronet.com on-line tool)

  3. Cubic meter of the building

  4. Rough grouped quantities or elemental Bell Method

  5. Detailed quantities of a bay

  6. Comparison of Costs at relative dates

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The service unit method

Buildings are constructed to serve a specific purpose. For example hospitals are designed to accommodate certain number of beds. Each bed is then considered a service unit. Hotels are designed to accommodate certain number of guest rooms. each guest room is considered a service unit. Same applies to offices, residential houses, .. etc. Whenever a building is constructed the Engineer or the architect keeps the record of the place, actual cost, number of service units, and the year of construction. From this record, it is possible to work out the cost per service unit. This cost is then adjusted to account for inflation, and peculiarities of the project under consideration. Then the adjusted cost per service unit is simply multiplied by the number of service units in the proposed project to get an approximate cost estimate.

The square meter of floor area method

The floor area of the proposed structure is worked out, and then multiplied by a suitable rate. This rate of construction per square meter of floor area is worked out by dividing the known cost of construction of a similar building by the floor area of that building.
There are some variations of this method:
1. One way is to add all the usable floor areas and exclude basement and roof (This method is adopted by the tool provided below this article)
2. Another way is to use certain rate for each floor, including roof and basement
3. Use different rate for basement floor, other floors, and roof
4. Another way is to have the unit rate of the lower floor include basement and foundations and that for the top floor include roof.

The cubic meter method

This method is more accurate than the square meter of floor area method. because the depth of foundations and the height of the structure above the ground level are the additional dimensions taken into consideration. The American Institute of Architects recommends considering the actual cubic space enclosed within the outer surfaces of the outside walls and contained between the outer surfaces of the roof and 15 cm below the finished surface of the lowest floor.

The elemental bill method

In this method, a building is divided into as few items of measurable work as possible. The cost per unit quantity of each group is worked out separately, taking into consideration all the different operations which are combined together for simplicity. It is clear that this method requires conceptual design drawings to be ready for rough quantity take off. Though not very common but gives more accurate results than previously discussed methods

The detailed quantities of a bay

This method is particularly suitable for buildings which consist of repetitive bays, such as a garage, a workshop building. Detailed quantities are taken out of all the different items of work involved in a typical bay and finding out the cost of such items using suitable rates.

The cost comparison method

The approximate cost of the proposed structure is found out by modifying the known cost of similar existing structure with due consideration to price fluctuation between the dates of construction of the old and proposed structure.
This method gives the best results but it is only applicable to structures which are repetition of similar works.


The tool provided here must be used with caution and the output must be taken as indicative cost estimate. The tool requires Java-Script enabled in your browser. If your browser does not support Java-Script you may not be able to use this tool

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