What are the causes for construction cost escalation?

This is the area where most of us play foolish & become the vitcims of cost escalation. Before going for any project we should do a proper market survey& collect information about the right price of the materials to be purchased. And then we should also approach the right contarctor who can turn our project into reality without adding up to the cost.

The very basic components which form the construction costs are steel,cement,tackles, transport etc.smart items like,electric fittings sanitary fittings,POP,and the last but not the least labor.So,decide the specifications and allocate the funds.The majors,steel and cement are the most volatile provide for escalation inbuilt in the contract so that contractor may not find alibi to delay the project.So what i mean,fix the budget for each item and monitor the cash flow.Please do avoid  lump sum allocation and be clear about the investment.

Any person responsible for cost analysis of any project must be aware lots of information on market trends. One should be aware of trends in the total construction & infrastructure industry. The infrstructure industry is in boom today and hence, the prices of cement & steel are escalating. When there is a boom in building industry all the other material and even labour cost gets escalated. Thus, study of market trends is very essential.

This is fact that most of the planning is made by the higher authorities with thier mind set-up. Planning made without knowing the ground realities is said to be improper. As the implementation part is going to be performed by the persons in the practical situations. Sometimes the planners make good plans but it fails due to the executing people. The construction cost , if it is estimated in the planning level will get escalated due to above reasons.