Construction is one of the largest industries in the world economy with an estimated $10 trillion spent in the sector every year. While construction has rapidly evolved from a local to a global industry, its practices have not. A prime example is the way it classifies and reports costs for building and infrastructure projects. Because these vary significantly from one market to the next, it’s almost impossible to compare costs on a like-for-like basis which hinders decision making and creates barriers to investment.

A group of more than 45 not-for-profit organizations spanning architecture, construction, infrastructure and civil engineering, called the International Construction Measurement Standards (ICMS) Coalition, have come together to solve this problem.

This month the International Construction Measurement Standards (ICMS) launches. The global initiative creates a common language for the sector and defines a universal system for presenting the cost of construction projects, allowing comparisons to be made on a like-for-like basis between countries, ultimately enhancing transparency, investor confidence and public trust in the sector.

Why does the construction industry need a new international standard?

Currently, cost consultants and quantity surveyors add costs together in different ways and include different items in totals. Depending on where the project is located, as an example, the costs might include or exclude labor and materials, land acquisition, professional fees and client costs.

Knowing what is, and what is not included in the construction cost of a project is vital to understanding:

1. How a project compares with other projects within or outside the market
2. Accurately assessing value-for-money
3. Assessing and benchmarking project construction costs

When governments and investors finance public infrastructure projects, taxpayers need to know they are getting the best deal possible.

Before ICMS launches, find out the top four ways it will revolutionize the construction industry:

1. Common terminologies
   Cost grouping descriptions vary enormously around the world, making it difficult to compare costs on a like-for-like basis. Currently, there is no common global understanding for what is included or excluded from a ‘construction cost’ – leading to variances of up to 30%. ICMS allows a common terminology to be adopted for construction costs and principal components. ICMS also identifies the key cost drivers using standard terminology – leading to the collection of data that can be interrogated, searched and compared.
2. Technology-friendly format
   With the ever-increasing use of Building information modeling (BIM) in construction, professional standards need to inform the technologists of the form, content and structure of data needed in their work processes. ICMS achieves this at an over-arching global level by aligning taxonomies across buildings and civil engineering and across design classifications and cost reporting. Software vendors are already seeing the potential to use ICMS in global cost benchmarking and the relative simplicity of the standard encourages data collection.
3. Standard cost data
   Standards for presenting costs in construction used today differ within countries and from one jurisdiction to the next which creates inconsistency and confusion. Having multiple standards to do something is no standard at all. Easier and more robust comparisons and benchmarking between projects in different global, regional and intra-national markets are made possible through the use of ICMS. ICMS is also detailed enough to allow key design comparisons to be made in both scenario option planning and risk management.
4. Unifying a fragmented profession on a global scale
   The financial management of construction projects is carried out by different players in different markets. Unlike other global professions, there is no unified global approach to providing the certainty and transparency that investors and clients in construction demand. ICMS is an important first step in harmonizing this approach to enable more consistent decision-making, better regulation, a template for education and training and improved project outcomes.

These are just a few of the ways ICMS will shape the future of the global construction industry. Register for a free informational webinar on August 15th, hosted by the Vice Chair of the ICMS Standard Setting committee, Alan Muse, to learn more about this radical new approach to improve the quality of cost data and reporting in construction.