NAME: DANIEL DANLAMI KOLO

MATRIC. NO.: 2011/1/37772VQ

LEVEL: 300
DEPARTMENT: QUANTITY SURVEYING
COURSE: QTS 313 (TENDERING AND ESTIMATING)






21ST APRIL, 2014

PREFACE

The construction industry contributes significantly in terms of scale and share in the
development process for both developed and developing countries. The construction products
provides the necessary public infrastructure and private physical structures for many productive
activities such as services, commerce, utilities and other industries. The industry is not only
important for its finished product, but it also employs a large number of people (directly and
indirectly) and therefore has an effect on the economy of a country/region during the actual
construction process.
The attitude of building professionals toward issues related to the economics of building
at times seems somewhat ambivalent. Most professionals agree that economic factors are quite
important; in fact that they often influence design decisions more than any other single factor and
should be well understood by the designer. On the other hand, in the prestigious journals where
the profession represents its work to itself and the world, in discussions of architectural theory,
and in the curricula of Schools of Architecture, one finds little concern for the issue. It seems
tainted or even dirty. Architects who manage to design building that work out well
economically for their clients run the risk of being considered hacks by their colleagues Are
the economic issues of building unworthy of the architects creative effort?







INTRODUCTION
There are many different decision and design problems in the realm of building
economics, depending on what is known, assumed, or given in a specific situation, and what
answers must be found in that situation.
First is the level at which the decisions are made. The situation that comes to mind most
often is that of the individual decision-makers for a specific project trying to arrive at the best
decisions for that projectsuch as the interior architect trying to design a specific building to
best serve the interests of the project client.
Building economics issues also include the concerns of specific groups involved in the
building process within society or the overall economy, with the aim of safeguarding the
interests of those groups and maintaining or improving their economic position relative to other
parties. This can take two main directions: seeking to maintain or improve the context conditions
within which the group operates; or trying to help members of the group become more
competitive and effective by developing better methods and techniques for doing its work,
providing better information and the analysis tools needed to turn that information into better
decisions.
Finally, there is the level of governmental or societal policymaking, which is concerned
with the overall effectiveness of the entire system of building planning, design, production,
operation, and maintenance, and the proper balance among all its parties and components.
The total number of possible combinations and thus problem types arising from this brief
survey is very large; and not all combinations are necessarily meaningful. The following list
includes some typical building economics problems that often are encountered
Building economics consists of the application of the techniques and expertise of
economics to building projects. Economics in general is about the choice of the way in which
scarce resources are and ought to be allocated between all their possible uses. Building
economics is a small part of a much larger subject of environmental economics. This is
concerned with the study of mans needs in connection with shelter and the suitable and
appropriate conditions in which to live. It seeks to ensure the efficient use of resources available
to the industry, and to cost studies of buildings.
BUILDING ECONOMICS-THE HEARTBEAT OF CONSTRUCTION
Output from the construction industry is a major and integral part of the national output,
accounting for a sizeable proportion in the Gross Domestic Product (GDP) of both developed
and underdeveloped countries (Tse and Ganesan 1997, Crosthwaite, 2000). Lowe (2003) further
stated that the value added of construction is in the range of to for highly developed
economies and around to for underdeveloped economies



To tender it is necessary to know the cost of a unit production (money/

excavation,
Money/

of top soil stripping, etc.) To find the cost of operating of an equipment, it is essential
to estimate many factors, such as, fuel consumption, tire life, and so on. The best basis for
estimating such factors is to use the historical data (=records). If this data is not available, the
equipment manufacturer can be consulted.
Building economics seeks to ensure the efficient use of resources available to the industry, and to
increase the rate of growth of construction work in the most efficient manner. In a bid to improve
the economics of building, the following have been properly addressed by economists to foster
consumers interest and boost the market:
-Clients budget: it is important to a clear view of the clients wants and needs, ensuring that
construction is kept within the confines of the budget.
-Environmental impact assessment should be qualitatively conducted to evaluate and
understanding the resulting effects of he planned construction.
-It is necessary to make a clean estimate of the building cost before construction is started to
ensure construction optimization and proper advice to the client.
-The relationship of space and shape: this evaluates the cost implications of the design variables,
and considers those aspects of a particular design and their effects on cost. It does not seek to
limit the designers skill or the aesthetic appearance of the project, but merely to inform the
designer and the client of the influence of their design on the overall cost.
-The estimation of the life of buildings and materials: The emphasis on the initial construction
costs has moved to consider the whole-life costs of a project. The spending of a little more
initially may result in a considerable saving over the life of the building. However, the estimation
of building material life, interest rates and the economic life of a project can be difficult in
practice. The influence of taxation can have a substantial effect on whole-life costs.
IMPORTANCE OF BUILDING ECONOMICS
contractors profit
construction cost
clearance from various authorities
debt service
Furnishings etc.
life time investment
magnitude
attitude and
finance