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How Market Price Change Affect Construction Project Cost?
Oct 15 at 05:35
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2 Replies
Oct 15 at 05:35
I notice when steel and material price change in global market, it also make big effect on construction project cost. Sometimes even small rise in dollar or oil price increase total project budget. Because of this, I start working with construction estimating consultants who help me update cost based on market rate. Do you think construction companies should also watch forex and commodity market like traders do? How you handle price risk when market is not stable?
Nov 05 at 15:28
Нou’re right that even a “small rise in dollar or oil price increases total project budget.” In practice, price bids with escalation clauses (steel/oil indices) and hedge imported-FX via rolling forwards; otherwise the firm is effectively speculating.
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