Cost estimators collect and analyze data to estimate the time, money, resources, and labor required for product manufacturing, construction projects, or services. Some specialize in a particular industry or product type.
Cost estimators typically do the following:
Accurately predicting the cost, size, and duration of future construction and manufacturing projects is vital to the survival of any business. Cost estimators' calculations give managers or investors this information.
When making calculations, estimators analyze many inputs to determine how much time, money, and labor a project needs, or how profitable it will be. These estimates have to take many factors into account, including allowances for wasted material, bad weather, shipping delays, and other factors that can increase costs and lower profitability.
Cost estimators use sophisticated computer software, including database, simulation, and complex mathematical programs. Cost estimators often use a computer database with information on the costs of other similar projects.
General contractors usually hire cost estimators for specific parts of a large construction project, such as estimating the electrical work or the excavation phase. In such cases, the estimator calculates the cost of the construction phase for which the contractor is responsible, rather than calculating the cost of the entire project. The general contractor usually also has a cost estimator who calculates the total project cost by analyzing the bids that the subcontractors' cost estimators prepared.
Some estimators are hired by manufacturers to analyze certain products or processes.
The following are the two primary types of cost estimators:
Construction cost estimators estimate construction work. More than half of all cost estimators work in the construction industry. They may, for example, estimate the total cost of building a bridge or a highway. They may identify direct costs, such as raw materials and labor requirements, and set a timeline for the project. Although many work directly for construction firms, some work for contractors, architects, and engineering firms.
Manufacturing cost estimators calculate the costs of developing, producing, or redesigning a company’s goods and services. For example, a cost estimator working for a home appliance manufacturer may determine whether a new type of dishwasher will be profitable to manufacture.
Some manufacturing cost estimators work in software development. Many high-technology products require a considerable amount of computer programming, and the costs of software development are difficult to calculate.
Two other groups also sometimes do cost estimating in their jobs. Operations research, production control, cost, and price analysts who work for government agencies may do significant amounts of cost estimating in the course of their usual duties. Construction managers also may spend considerable time estimating costs. For more information, see the profiles on operations research analysts and construction managers.
Source: Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2012-13 Edition