Construction inflation definition
The New Rules of Measurement (NRM) are published by the Royal Institute of Chartered Surveyors (RICS). They provide a standard set of measurement rules for estimating, cost planning, procurement and whole-life costing for construction projects.
According to NRM1: Order of cost estimating and cost planning for capital building work, the term ‘construction inflation’ refers to:
'…an allowance included in the order of cost estimate or cost plan for fluctuations in the basic prices of labour, plant and equipment, and materials during the period from the date of tender return to the mid-point of the construction period. See also the definition for tender inflation.'
This is as opposed to tender inflation, which is:
'…an allowance included in the order of cost estimate or cost plan for fluctuations in the basic prices of labour, plant and equipment, and materials during the period from the estimate base date to the date of tender return.'
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