Construction economics is all about managing the finances, budget and other accounts processes for construction projects.
In Ireland, particularly after the disastrous fallout from the Celtic Tiger bust, prudent financial management of construction projects has never been more important.
So what exactly is Construction Economics and what does a Construction Economist do?
Construction economics is the process of economising construction processes – from project initiation to completion – ensuring practical and sustainable financial decisions are made throughout the project. But this role is not just about tightening purse strings, it also requires a dexterous ‘bigger picture’ mentality. The project economist needs to know where spending needs to be made to ensure the best possible quality resources are used during construction.
The role is all about balance. If a construction project economist is too driven by the bottom line then the project may be completed within budget, but at what cost? Poor quality materials and construction processes will cost dearly later on. On the other hand if the project economist is too cavalier about spending and wastes a lot of funds then the project may never be completed at all. Funds will simply dry up and the project will grind to a halt.
By maintaining a sensible approach to financial and accounts management the CE of the construction project can ensure the project runs smoothly and avoid financial mismanagement.
The Construction Economist job description
The construction economist has a range of roles and responsibilities all of which involve keeping projects ticking over within budget and without too many financial headaches. They have to deal with the challenges of individual projects, major redevelopments and maintenance programmes. Above all, they need to ensure construction projects perform efficiently and economically sensibly.
Typical tasks include:
- Preparing a construction budget
- Cost planning to ensure value for money design and engineering
- Advising governments on establishing cost limits for various building types
- Advising procurement routes and choice of contracts
- Preparation of construction estimates
- Administration of cost control during the course of construction projects for both clients and contractors
- Negotiation of Final Accounts
- Dispute Resolution services
- Capital taxation advice
- Advice to funders
- Advice on development budgets
The changing face of Construction Economics
In Ireland, a lot has changed since the heady days of the Celtic tiger. During these times of austerity the whole of Europe is adopting new approaches to financial management.
Within construction projects around the EU, the role of the Construction Economist is becoming more critical. The discipline and accountability the CE brings to the project is now seen as a necessity by Irish construction companies. CEs now play a more central role in the project management process. By advising building and infrastructure clients or contractors on the best ways to achieve value for money, while getting quality resources and maintaining the health of their project accounts, the CE can help ensure a construction project actually gets completed and that all involved parties can be happy with the result – thanks to their prudent construction economics.