What Is a Construction Budget?

A construction budget is an estimate of the money required to take a construction project from initiation to closure, including all associated costs and expenses that are accrued during the building process. While the budget is an attempt to forecast all costs in a construction project, it is imperative to allow for contingencies in the budget to accommodate any unforeseen building costs.

Pre-construction and cost managers start with the project plan, logically a blueprint, to assess what materials will be required. Factors like job site preparation must be considered, which can include logistics and safety planning, demolition costs, equipment rentals, permitting, and inspection costs.

As the project execution begins, other costs start to appear. There are labor costs and safety requirements for all on-site workers. Transportation can be another cost. Residential and commercial construction projects will also have unique costs. It is necessary to consider and calculate all of these variables.