Predictive Analytics for Early-Stage Construction Costs Estimation

Abstract

Low accuracy in the estimation of construction costs at early stages of projects has driven the research on alternative costing methods that take advantage of computing advances, however, direct implications in their use for practice is not clear. The purpose of this study was to investigate how predictive analytics could enhance cost estimation of buildings at early stages by performing a systematic literature review on predictive analytics implementations for the early-stage cost estimation of building projects. The outputs of the study are: (1) an extensive database; (2) a list of cost drivers; and (3) a comparison between the various techniques. The findings suggest that predictive analytic techniques are appropriate for practice due to their higher level of accuracy. The discussion has three main implications: (a) predictive analytics for cost estimation have not followed the best practices and standard methodologies; (b) predictive analytics techniques are ready for industry adoption; and (c) the study can be a reference for high-level decision-makers to implement predictive analytics in cost estimation. Knowledge of predictive analytics could assist stakeholders in playing a key role in improving the accuracy of cost forecast in the construction market, thus, enabling pro-active management of the project owner’s budget.