What is a comparative estimate?

A comparative estimate is defined as an estimate based on historical cost data from similar past projects. This approach allows estimators to analyze previous project costs for comparable construction tasks, materials, and methods, enabling them to develop a more accurate estimate for a new or ongoing project.

By relying on data from similar completed projects, estimators can take into account variables such as inflation, changes in material prices, and regional cost differences. This historical perspective aids in establishing a more reliable baseline for costs, which is particularly useful in the construction industry where expenses can fluctuate significantly based on various factors.

Utilizing comparative estimates also helps in improving accuracy by minimizing the impact of estimating errors that might occur if one were to use generalized assumptions or current market prices alone without considering past performance and conditions. Thus, this method fosters better budget planning and resource allocation which is critical in project management and financial oversight.