Throughout much the world, the business of property and construction is becoming increasingly globalised and typified by multi-national investment in property development and international partnering in large scale building and infrastructure projects.

The situation is no different in Australia, where foreign cash allocated to commercial, residential, retail and industrial assets as well as infrastructure projects has been pouring in of late, and where refrains about excessive construction costs compared with international norms are becoming increasingly frequent.

For now, however, one factor which is hampering the efficiency of the market revolves around a lack of consistency about how costs and measurements are defined throughout different parts of the world. Imagine, for example, we were to say that a commercial building in Sydney costs $A3,000 per square metre to design and construct whereas one in New York costs $US2,500. As things stand at the moment, such a comparison would be affected not only by exchange rates but also by whether or not the ‘cost’ in each case includes or excludes finance costs or amounts paid for professional fees and whether or not the floor area in both cases includes or excludes space associated with balconies, car-parks or elevator shafts. In short, we have no straightforward way of comparing costs across international jurisdictions on a like-for-like basis.

For this reason, a push to create global standards in construction measurement is on. Recently, around 30 professional associations representing members from around 140 countries in the fields of quantity surveying and cost engineering announced the formation of the International Construction Measurement Standards Coalition, which will work to develop a multi-national framework which will contain overarching international standards which will harmonise cost, classification and measurement definitions.

Michael Manikas, chief executive officer of the Australian Institute of Quantity Surveyors (AIQS), a member of the new coalition, says the coalition is largely adopting a ‘blank canvas’ approach and is in the embryonic stages of working out how far it would like to go and what it would like to achieve. Still, he says it is likely that the first phase of the initiative’s efforts would revolve around clarifying basic concepts and definitions, such as what is and is not included in construction costs and how buildings are measured in terms of gross floor area as per the issues referred to in the example above.

Longer term, he says, standards revolving around cost planning for projects, the performance of quantity surveying work and the level of competency required would be possible. Even further down the track, a standard covering actual methods of measurement such as how doors are measured and described could come into play.

Manikas says consistent international standards could have a number of benefits. Providing foreign companies with the ability to more easily and accurately compare construction costs in Australia with those in their home country could help encourage more foreign investment within the local property and building sector. Standardisation of basic rules would also enhance the mobility of quantity surveyors and cost engineers across countries, opening up more opportunities for Australian professionals internationally. Finally, consistent international standards would help the local property and construction sector to more accurately benchmark its cost performance against that of overseas counterparts.

“How many times do we hear governments being criticised with people saying our road and rail projects in Australia cost four times as much as they do in other countries?” Manikas said.

“(At the moment,) we don’t know whether or not whoever is making that criticism is actually comparing like for like. (But) when we have this international standard in place, if somebody does a comparison of cost per kilometer on rail compared with Spain or the United Kingdom, we will know we are comparing apples with apples.”

Alistair Bowden, chairman of the Australian Cost Engineering Society and the Australian section president AACE International, says any move toward international standardisation is welcome. Bowden says at the moment, a tendency on the part of international clients to want to use their own standards of measurement when pursuing projects in Australia can often create challenges for local contractors and engineers in terms of accurately pricing tenders when bidding for work.

“I think anything (the new coalition) is going to do to standardise things is a good thing,” Bowden said. “If the international community can establish these things across countries, which it appears that that initiative is all about, then that’s even better.”

Still, Bowden warns that getting industry clients to adopt international standards in place of their own current standards could be challenging.

“You might get agreement between the associations. Trying to get industry and other people to use it is possibly where the hurdle is,” he said.

In the world of finance, the development of a set of global accounting rules has dramatically helped to improve confidence in multi-national investment, the international mobility of finance and accounting professionals and the overall efficiency of the world economy – albeit with the process having taken place over several decades.

In the world of quantity surveying and cost engineering, the push for consistent rules is now on and could dramatically improve the worldwide efficiency of investment in property and construction, with substantial benefits for Australia.

But it could be a tough slog, and hard yards remain.

  • Andrew, the digitisation, industrialisation and globalisation of construction now has a momentum of its own. Australia has yet to put a boat in the water. While understanding the relative cost per unit of output for developed countries is interesting that information does not prepare the industry for construction competitiveness in our immediate region where most are still in the developing phase. Developed country construction costs are the product of developed country construction practices and accepted cost norms. These costs are simply unaffordable in developing countries and as such their methodologies are unsustainable. Unless Australian construction really starts turning around our woeful productivity then we will not be part of the game. Meaningful comparisons using the total of on-site labour inputs per unit of out-put and on-site construction durations per unit of out-put that go to the heart of productivity measures are better benchmarks. That is why new construction delivery models are taking off in China and India. That is why BIM is showing it has nothing to offer until it shows how it adds to systemic productivity v DfMA. And then there Australian standards?

  • How can standardised measurement be seen as a benefit without mentioning what is being measured? The focus of the text is on cost but a professional quantity surveyor would focus on quantity, and a quantity surveyor who measures is not a cost engineer although s/he may also perform such a role if s/he works on the contracting side of the industry. Professional quantity surveyors analyse prices calculated by contractors.