Construction cost vs project cost
Construction costs form part of the overall costs incurred during the development of a built asset such as a building. Very broadly, construction costs will be those costs incurred by the actual construction works themselves, and on some projects may be determined by the value of the contract with the main contractor. Construction costs may also include costs that might not in themselves be considered literal construction costs (hard costs), such as fees, profits, overheads, and so on.
Many projects will also include costs that it is not possible to determine when the construction contract is awarded (such as prime cost sums and provisional sums), and there may be construction works that are awarded by the client outside of the main contract (such as fitting out the interior, minor alterations to the completed works, installation of equipment, and so on).
In addition, the contract is likely to allow for the contract sum to be adjusted as a result, for example, of variations to the works, claims for loss and expense, or fluctuations (a way of dealing with inflation on large projects that may last for several years).
For more information see: Construction cost.
There will also be much wider project costs that are incurred by the client, in addition to the cost of any construction costs.
These wider project costs might include:
- Land or property acquisition.
- Commissions.
- Statutory fees.
- Consultant fees directly associated with the development.
- Some fixtures and fittings.
- Project insurance, inflation, taxation and financing.
- Internal costs directly associated with the development.
Once the project is operational, there will be other ongoing costs:
- Wages.
- Utilities.
- Maintenance and repairs.
- Utilities.
- Insurance.
- Security.
- Rent.
- Sales.
- General and administrative expenses.
For more information see: Operational cost.
It is very important when planning projects and allocating budgets and responsibilities to be very clear where different costs are allocated and who is responsible for monitoring and controlling them.
[edit] Related articles on Designing Buildings
Featured articles and news
Building Safety recap January, 2026
What we missed at the end of last year, and at the start of this...
National Apprenticeship Week 2026, 9-15 Feb
Shining a light on the positive impacts for businesses, their apprentices and the wider economy alike.
Applications and benefits of acoustic flooring
From commercial to retail.
From solid to sprung and ribbed to raised.
Strengthening industry collaboration in Hong Kong
Hong Kong Institute of Construction and The Chartered Institute of Building sign Memorandum of Understanding.
A detailed description fron the experts at Cornish Lime.
IHBC planning for growth with corporate plan development
Grow with the Institute by volunteering and CP25 consultation.
Connecting ambition and action for designers and specifiers.
Electrical skills gap deepens as apprenticeship starts fall despite surging demand says ECA.
Built environment bodies deepen joint action on EDI
B.E.Inclusive initiative agree next phase of joint equity, diversity and inclusion (EDI) action plan.
Recognising culture as key to sustainable economic growth
Creative UK Provocation paper: Culture as Growth Infrastructure.
Futurebuild and UK Construction Week London Unite
Creating the UK’s Built Environment Super Event and over 25 other key partnerships.
Welsh and Scottish 2026 elections
Manifestos for the built environment for upcoming same May day elections.
Advancing BIM education with a competency framework
“We don’t need people who can just draw in 3D. We need people who can think in data.”
Guidance notes to prepare for April ERA changes
From the Electrical Contractors' Association Employee Relations team.
Significant changes to be seen from the new ERA in 2026 and 2027, starting on 6 April 2026.
First aid in the modern workplace with St John Ambulance.
Solar panels, pitched roofs and risk of fire spread
60% increase in solar panel fires prompts tests and installation warnings.
Modernising heat networks with Heat interface unit
Why HIUs hold the key to efficiency upgrades.