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 a budget to accommodate any unforeseen building costs.

Pre-Construction and Cost Managers start with the project plan, logically a blueprint, in order 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 begin 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.