If a contractor does not have a solid estimate, they are essentially guessing. Accurate Construction estimating takes away the guesswork by providing precise cost for everything on the drawings and project specs. The following breaks down what goes into building an estimate a contractor can actually bid from.
Construction estimating services provide the information needed for a contractor to base their bid on. Universe Estimating provides our clients with up-to-date pricing, accurate quantities, and detailed estimating without shortcuts.
What Does Construction Cost Estimation Actually Cover?
Construction cost estimating is the process of calculating the expenditures that occur before the commencement of a construction project. It comprises costs of materials, equipment, labor, subcontractors, permits, and overhead. This estimate becomes the financial base for the entire bid. A good estimate uses quantities from the drawings and current market prices. It also includes contingency costs for unknowns. Site conditions, access, and work sequence are also important. All these things may not be seen on a materials list, but they can greatly impact the final cost. Not considering any of these factors can make your estimates misleading.
Why Are Skilled Estimators So Hard To Find Right Now?
Finding a competent estimator is becoming a challenging task, which may affect the accuracy of bids. According to FMI’s 2026 research, 43% of respondents have faced challenges finding and filling estimating and preconstruction jobs. Moreover, 25% struggled to fill estimating management positions.
In addition, the construction labor market faces a shortage of professional workers. Hence, Associated Builders and Contractors (ABC) estimates that the construction industry will experience a shortage of 349,000 workers by 2026. Consequently, if there is a deficit of professional estimators, it becomes essential to correctly perform project cost estimation so that a contractor remains competitive and profitable.
How Many Types Of Construction Estimates Are There?
Not all estimates are equally reliable. Getting the wrong type of estimate at the wrong time can lead to confusion. There are 3 main estimate types that cover the project lifecycle:
- Order-of-magnitude estimate: It is a rough estimate that is based on similar past projects. It is used before design to see if the project is viable. It is a very general indication of the cost and has a very broad accuracy. The primary concern is defining the project’s viability.
- Budget (preliminary) estimate: Prepared after the initial design concept is established. It serves to set the working budget and secure project financing. The figure obtained is used by owners and lenders to make a decision to move on to the working design stage.
- Detailed (definitive) estimate: It is done on the basis of thorough drawings and specific details. It is used for finalizing and contracting purposes. This is the cost that is included in the final contract.
For accurate project budgeting, the estimate at the design stage is vital. This figure should not be regarded as the final cost, but rather the starting point for the budget.
What’s Actually At Stake When Estimating Falls Short?
The impact can build up to the point when the project exceeds the set budget due to the current shortage of construction workers.
According to Associated General Contractors of America, the construction industry will need 439,000 new workers in 2025 and 499,000 in 2026.
Insufficient numbers of skilled workers may lead to increased costs of labor, which will make the estimation of construction costs more difficult. Higher labor costs can render estimates based on previous labor rates misleading or inaccurate.
Conclusion
Construction estimating is the backbone of a successful project. Estimation takes into account the cost of labor, materials, and shifting market conditions. In the face of a difficult work environment and increasing labor costs, an accurate estimate is a necessity. Universe Estimating creates estimates based on current market conditions and costs, which gives contractors an edge when it comes to bidding on jobs.
