Construction Costs Analysis and its Importance to the Economy

Abstract

Reliable estimates of construction costs and schedules presented by contemporary construction companies, their consultants and suppliers at the time of project approval are important for justifying a project on economic ground and for planning the means of financing it. The economic impact of a construction cost overrun is the possible loss of the economic justification for the project. A cost overrun can also be critical for creating policies within sustainable development on the basis of economic costs. The financial impact of a cost overrun results also in demand for construction investments credits. The paper presents a case of construction cost analysis for wooden energy efficient house that meets sustainable aspects. Analyzed object is characterized by high costs of the construction investment, that result from specific characteristics of the construction output (energy efficient wooden house). In the result of analysis of the construction investment costs for the efficient wooden house and its comparison with the costs of traditional construction investment on maintenance costs, it can be stated that additional cost resulting from the energy efficient house building is higher than costs of traditional construction investment (about 10%) and it can be treated as the investment in the energy efficient house solutions since it brings savings for home expenditures (5% annually).