Labour Market Analysis: Impact on Early Building Cost Estimation

This report examines the impact of the labour market on the accuracy of early-stage building cost estimation, focusing on labour availability, performance, and prices. It highlights how factors such as contractor experience, decision-making speed, site management, and communication influence cost estimates. The report also discusses the importance of balancing skilled and unskilled labor and considering regional labor rates during cost estimation. A comparison of elemental versus trade cost breakdown is presented, using the foundation as an example. Effective manpower management and labor productivity are emphasized as key factors in minimizing labor costs and improving the accuracy of building cost estimation, ultimately ensuring projects are completed within budget and on schedule. Desklib offers similar solved assignments for students.

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EARLY STAGE BUILDING CONSTRUCTION ESTIMATE
A Research Paper on Labour Market By
Student’s Name
Name of the Professor
Institutional Affiliation
City/State
Year/Month/Day

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INTRODUCTION
An early cost estimate is the estimation of the cost during the early stages of building projects.
This stage is characterized by high uncertainty degree due to the limited available information to
determine an accurate estimation of costs or having no or little variation from the exact costs to
be uncured during the implementation stage of the construction project. The exactness of the
initial phase cost estimation resulting from the determination of the initial cost assessment is
significant to the progress of the project from one stage to another. This report focuses on the
effects of the labour market on the accuracy of the early stage building cost estimation by
majorly focusing on the labour availability, labour performance, and labour prices.
Labour Performance
In regards to the performance of the sub-contractors and sub-contractors, the skills of
communication should normally be exercised to prevent conflicts between the other groups and
the contractor. Communication between the contractor and other groups may be regarding the
selection of materials or the best process to use to achieve the required objective. Lack of proper
coordination may lead to misunderstanding between the contractor and other parties, poor
selection of construction materials, and poor management. In case there is no suspension during
the project construction process, there will be the failure of some factors such as project schedule
since a lot of time will be spent consulting and making collective decisions (Arthur, 2012).
In case the contractor does not have the necessary skills and experience for the construction
project, those will slow down the process of construction as well as the process of making
decisions. The inexperienced contractor is likely to use a lot of time evaluating on the impacts of
a particular decision have on the performance of the construction process before making the final

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decision. Some of the labour performance factors that affect the accuracy of building cost
estimation include inadequate contractor experience, low speed of decision making, poor site
management and decision making by the contractor, and lack of communication among the
parties involved (Holm, 2012). The table below shows the rank of different factors of labour
performance:
Table 1: Labour performance ranks (the Moselle, 2016)
In case a contractor maintains a steady communication channel as well as having necessary skills
and experience there will no time delay and the project will be completed on time hence
preventing unnecessary costs that may be incurred by the prolonged project construction process.
This means that the project will be completed at a timeframe schedule and the cost estimated will
not be exceeded (Ogershok, 2012).

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Labour Prices
Labour is a major resource need for any project of construction. In case the contractor uses too
many workers, then the cost of hiring would be greater than the estimated cost. However, if there
are few workers working on the construction project, then the construction project would not be
completed on the stipulated schedule (Popescu, 2012). There is a need for balancing the
unskilled workers who can complete the overall construction and the skilled workers such as
those who operate the specified equipment. The table below shows the ranking of the labour
prices:
Table 2: Labour prices ranking (Pratt, 2011)
Prices of hiring different services of labour greatly vary from one another. For example, it is
more costly to hire workers who are licensed to operate the machine of excavation compared to
the cost of hiring unskilled workers without any specialized skills. It depends on the salaries and
wages of the labour force which vary from one region to another. A good project cannot be
attained without management of manpower and human resources, suitable allocation of the
labour force, and sufficient unskilled and skilled manpower. The labour rates of the region
should be considered and also the number of unskilled and skilled workers that need to be
employed to complete the project of construction during the cost estimation (Pratt, 2018).

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Labour availability
The availability of both unskilled and skilled manpower enables an effective management of a
construction project since it enables the workers to be disseminated according to their areas of
specialization. Therefore, labour productivity and effective labour management is a significant
requirement for the reduction of the cost of labour and also increasing the profit of the
construction company. The manpower can also be used for the purposes of reducing the
expenditure such as a single employee works overtime and not having tow employees operating
at regular intervals (Singh, 2011).
This approach saves cost and enables the right number of individuals to be operating on a
particular construction project without spending too much during recruitment or too little that
may lead to struggling incompletion. The management of manpower can be distributed
effectively and also improve the labour productivity so as to minimize the costs of labour. This
would ensure that the costs of labour will be lower than the estimated cost and hence not
affecting the accuracy of the building cost estimation (Ogershok, 2012).
Elemental vs Trade Cost Breakdown Comparison
The selected building element for the comparison is the foundation whose trade items of a Bills
of Quantities are discussed below
Excavation works
The quantities are determined based on the foundation's dimensions in the plans of the owner.
The prices differ in terms of equipment used, shoring system, site location, groundwater level,
deep of excavation, and the soil type (the Moselle, 2016). Units to be determined in volumes
(m3). The figure below shows the dimensions of a construction foundation:

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Figure 1: Dimensions of building the foundation
Backfill
It is measured in volume (m3)
Conclusion

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This report focuses on the effects of the labour market on the accuracy of the early stage
building cost estimation by majorly focusing on the labour availability, labour performance, and
labour prices. Some of the labour performance factors that affect the accuracy of building cost
estimation include inadequate contractor experience, low speed of decision making, poor site
management and decision making by the contractor, and lack of communication among the
parties involved. The labour rates of the region should be considered and also the number of
unskilled and skilled workers that need to be employed to complete the project of construction
during the cost estimation. The management of manpower can be distributed effectively and also
improve the labour productivity so as to minimize the costs of labour.
Bibliography

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Arthur, W., 2012. Estimating Building Costs. Melbourne: John Wiley & Sons.
Holm, L., 2012. Construction Cost Estimating: Process and Practices. Perth: Pearson/Prentice Hall.
Moselle, B., 2016. 2017 National Building Cost Manual. Sydney: Craftsman Book Company.
Ogershok, D., 2012. National Building Cost Manual. Perth: Craftsman Book Company.
Popescu, C., 2012. Estimating Building Costs. Gold Coast: CRC Press.
Pratt, D., 2011. Estimating for Residential Construction. Toledo: Cengage Learning.
Pratt, D., 2018. Fundamentals of Construction Estimating. Melbourne: Cengage Learning.
Singh, S., 2011. Cost Estimation of Structures in Commercial Buildings. Perth: Macmillan International
Higher Education.