Modelling Influencing Factor Relationship for the Prediction of Construction Cost Indices

Construction projects typically require extensive periods for the completion and there are usually considerable time gap between cost estimation and project completion. It is essential to accurately predict construction costs in order to effectively estimate costs for construction projects. In the construction industry, construction cost indices (CCI) are useful in explaining the trend of construction cost variation. CCI are recorded and announced periodically and are influence by many other related factors such as price indices and business indices. Understanding the influencing relationship will help predicting future values of CCI and incorporating such understanding and prediction into estimating will help practitioners manage construction costs. This paper adopted system dynamics modeling methods and proposes CCI prediction model by incorporating influencing factors as model variables. Comparing the simulated results by the proposed model and the real values of CCIs verifies that the proposed model provides the future CCI values with sufficient statistical significance.

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