The RICS is embarking on a project to standardise the way construction costs are measured and expressed around the world – helping global investors to make like-for-like comparisons and national industries to accurately compare output and productivity.
Following its recent project to create International Property Measurement Standards, the RICS is putting together an alliance of international construction bodies to take the project forward.
The International Construction Measurement Standards group will have a kick-off meeting at the International Monetary Fund in Washington in June, and the project is expected to take 18 months to complete.
The RICS also hopes to engage major cost consultancies such as Aecom and EC Harris, whose backing would accelerate uptake of the new approach.
Alan Muse, director of built environment at RICS, said that significant variations in the way different countries measure construction output affects certainty for policy-makers and investors, and therefore investment.
Alan Muse: “confidence”
For instance, there is no international agreement on what is included in “cost per sq m” comparisons, and often professionals in different countries use different terminologies – particularly a problem between Europe and the US.
Muse told CM: “If you’re a Chinese investor coming to the UK, how do you compare the cost of an opportunity here compared to one in China? The construction cost definitions may not be the same, and the analysis of costs may be different.
“We want to take away these uncertainties, and create an over-arching standard for defining costs that practitioners can use.”
On the question of measuring construction output, he pointed out that accurate figures are important at both a macroeconomic level, for instance in expressing construction output as a percentage of a nation’s GDP, and at a project level.
He cited the recent analysis from a House of Lords committee, which calculated that, kilometre for kilometre, the £42bn construction cost of HS2 was nine times that of the TGV lines in France.
As well as the RICS, the organisations involved in the project are the International Cost Engineering Council, the Pacific Association of Quantity Surveyors, European Council of Construction Economists, and the American Cost Engineering Association. Each of these umbrella bodies will also have a number of member organisations.
Their task will be to “develop a consistent method for categorising and calculating construction output from one market to the next. In doing so projects can be accurately compared throughout the world on a like-for-like basis, fostering greater confidence amongst the many stakeholders involved including governments, investors, contractors, professionals and the public at large.”
Muse said he was hopeful that “as the new standard gains traction, it will subsume other peoples’ views and we’re confident it will be popular.”
The RICS says that a similar collaborative approach worked well for the recently launched International Property Measurement Standards (IPMS) which were developed by 62 professional organisations.
