Navigating volatile market conditions
April 09, 2024
Stantec’s Kip Skabar shares his perspective on risks and challenges in infrastructure project cost estimations in Construction Business
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How much does a heavy civil project cost to construct in our current market? And how sustainable can I afford to make it? These are questions that many infrastructure owners face in the wake of a global pandemic, amidst labor shortages/disputes, following record-high inflation rates, surging insurance premiums, and during continued supply chain disruptions. Many public agencies have sustainability policies and a desire to build sustainable infrastructure in accordance with the ISI Envision framework; however, with upward pressure on direct construction costs in recent years the priorities and focus often start and end with finding a viable funding plan.
Setting budgets on projects as engineers is risky business, particularly with the recent market conditions experienced across Western Canada. The level of design development is key in all of this, and the earlier in the planning/design process you are indicates a higher level of risk on project costs escalating at the time of construction. It is important to establish realistic expectations from all project parties with respect to the level of accuracy indicated by the engineers’ estimate and avoid the temptation to trim costs to meet budget constraints.
Read the full article in Construction Business.
