What is an estimate or estimation in construction industry?

Estimate is a rough calculation on quantities of various works & their expenditure, done by the experts of the relevant field before the execution of a project. Accuracy of an estimate depends on the experience, ability and judgement power of the estimator.

Anyone who willing to engage them on constructing something, they’ll surely bother about the quality & money/cost. To feel free from them a solution called “estimate / estimation” was derived…!

An estimator should be very careful of the quantity takeoff, using the given documents such as drawings, specifications and other documents regarding the project. Other than these, every estimate should prepare with the consideration of other 2 factors, which influence a project namely, direct & indirect cost. (Direct cost – cost of materials, equipment, labour & subcontracted cost,    Indirect cost – overheads, contingency).

Types of estimate


Approximate estimate –

It is also called budget, preliminary estimate. This type of estimate is prepared in the initial stage of a project. To give a clear idea to the owner (client) about the amount of cost needed for the project and to get the approval from necessary sanctioning bodies (eg: from banks to get loan). Documents such as project drawing plans, details about the land including electricity & water supply and a full clear report are necessary to carry out the estimate. Commonly the approximate estimate is calculated with relevant to the previous experience.eg: To calculate the estimate for a house, a previously (& also recently) completed similar house will be considered. Here the estimator already knows the rate for 1m2 area & with that he/she calculates the cost estimate for the newly proposed area (of similar house).

Approximate estimate = Rate of 1m2 (already known value) X proposed area (m2)


Type 2:

Plinth area estimate –

Plinth area estimate can be achieved by multiplying the values of plinth length, plinth width & plinth area rate. Here the plinth area is referred as, external plinth area of the building at floor level. Simply it can be also stated as the roof covered area of a building. Plinth area rate is derived by dividing the total cost of a previously constructed building by plinth area of the previously constructed building.

Plinth area estimate = Plinth area X plinth area rate.

Plinth area = plinth length X plinth width

Plinth area rate = Total cost of a previously built building / Total plinth area of that building.


There are some restrictions in calculating the plinth area of a building and some area have to include or exclude when calculating. Among that, areas which can include are,

Floor area with area of walls at floor level excluding the offsets of the building, internal shafts of sanitary fittings within 2m2, lifts, air conditioning ducts, area of porch at floor level (cantilever part can’t be included), area of barsati – a room on the terrace or roof top with veranda outside.

Areas which can’t include are,

Area of lofts, open balconies / un enclosed balconies, fascia, towers which project above terrace level, louvers & vertical sun breakers.

Documents such as line plan with complete specifications & costs for services such as water, electricity should be attached with estimate.


Type 3:

Cubic content estimate –

This type of estimate done by multiplying the volume of the building by the unit cubic rate achieved from the previously (also recent) estimate. This type of estimate is a little bit more accurate than above mentioned methods and mostly suitable for multi storied buildings. Here the cost of corbelling (corbel – a piece of stone, wood, brick, or other building material, projecting from the face of a wall and generally used to support a cornice or arch), cornice and other works like that are neglected.

Cubic content estimate = Volume of the building X unit cubic rate (known value)

volume of the building = plinth area (length X breadth of the proposed building) X height of the building  (floor to roof top)

unit cubic rate = total cost of the previously built building / total volume of that building.


Type 4:

Annual repair estimate and special repair estimate –

These estimates are prepared in order to maintain the constructed element in good condition.  Works that attached when consider repair works, white washing, painting, plastering works, patching works & etc. Special repair estimate is prepared in situations where the costs of materials increased when compare to annual repair estimate cost.


Type 5:

Revised estimate-

This estimate is prepared when the rate of previously submitted estimate increases by 5% or more than that. But here the reason for the preparation of estimate must have a strong & valid reason like sudden increase in cost of materials. The reason and comparative statement between 2 estimates should be annexed with the revised estimate.


Type 6:

Supplementary estimate –

This type of estimate is prepared when there is a necessary situation of supplementary work, to progress out the original work. The annexure of originally prepared estimate & supplementary estimated amount of the originally prepared estimate when submitting for requesting approve.


Type 7:

Detailed estimate-

Detail estimate is prepared with the help of complete set of contract documents. The preparation of detailed estimate can do under 2 phases such as work out with quantities of different works and calculate the cost of each work.

1) work out with quantities of different works – The whole construction work procedure is divided into categories such as excavation and earthwork, concrete work, formwork, reinforcement, masonry work, roof covering and roof plumbing, carpentry, painting and decorating, plumbing, electrical installation and etc.

The measurement takeoff procedure is done with the help of drawings/plans and then they are entered in measurement. Measurement sheet is a prescribed form which contains number of columns to enter the respective measurements and descriptions about the works. Finally the measurement columns are multiplied to get the necessary quantity.

2) Calculation of the cost of each work – The already obtained quantities are used to obtain the cost of each work. Calculated costs of each work item are summarized in order and that document is called as abstract sheet.

A detailed estimate should have documents such as report, specifications, drawings/plans, design charts and schedule of rates. Factors such as, material quantity, transportation of materials, location of site, labour charges, cost of equipment (commonly allowed:- 2% of the estimated cost), overhead charges (commonly allowed:- 2% of the estimated cost), contingencies & unforeseen (commonly allowed:- 4% of the estimated cost) items are needed to consider well while preparing the detailed estimate.

Note:  The rate used to estimate should check with current standard schedule of rates & in case of quantity, it should check with standard data book.