Cost Estimators

Summary

cost estimators image
Cost estimators visit worksites to collect information on manufacturing processes.
Quick Facts: Cost Estimators
2012 Median Pay $58,860 per year
$28.30 per hour
Entry-Level Education Bachelor’s degree
Work Experience in a Related Occupation None
On-the-job Training None
Number of Jobs, 2012 202,200
Job Outlook, 2012-22 26% (Much faster than average)
Employment Change, 2012-22 53,000

What Cost Estimators Do

Cost estimators collect and analyze data in order to estimate the time, money, materials, and labor required to manufacture a product, construct a building, or provide a service. They generally specialize in a particular industry or type of product.

Work Environment

Although cost estimators work mostly in offices, they often visit construction sites and factory floors. Some must work overtime to meet deadlines.

How to Become a Cost Estimator

A bachelor’s degree is generally required for entering the occupation. A few highly experienced construction workers may qualify without a bachelor’s degree. A strong background in mathematics is essential.

Pay

The median annual wage for cost estimators was $58,860 in May 2012.

Job Outlook

Employment of cost estimators is projected to grow 26 percent from 2012 to 2022, much faster than the average for all occupations. Overall job opportunities should be good as cost-conscious firms continue to rely on cost estimates.

Similar Occupations

Compare the job duties, education, job growth, and pay of cost estimators with similar occupations.

More Information, Including Links to O*NET

Learn more about cost estimators by visiting additional resources, including O*NET, a source on key characteristics of workers and occupations.

What Cost Estimators Do

Cost estimators
Estimators often collaborate with engineers and architects.

Cost estimators collect and analyze data in order to estimate the time, money, materials, and labor required to manufacture a product, construct a building, or provide a service. They generally specialize in a particular industry or type of product.

Duties

Cost estimators typically do the following:

  • Identify and quantify cost factors, such as production time, materials, and labor expenses
  • Travel to jobsites to gather information on materials needed, labor required, and other factors 
  • Read blueprints and technical documents in order to prepare estimates
  • Collaborate with engineers, architects, clients, and contractors on estimates
  • Consult with industry experts to discuss estimates and resolve issues
  • Use computer software to calculate estimates 
  • Evaluate a product’s cost-effectiveness or profitability
  • Recommend ways to make a product more cost effective or profitable
  • Work with sales teams to prepare estimates and bids for clients
  • Develop project plans for the duration of the project

Accurately predicting the cost, size, and duration of future construction and manufacturing projects is vital to the survival of businesses. Cost estimators’ calculations give managers or investors this information.

When making calculations, estimators analyze many inputs in order to determine how much time, money, and labor a project needs and how profitable it will be. These estimates have to take many factors into account, including allowances for wasted material, bad weather, shipping delays, and other factors that can increase costs and lower profitability.

Cost estimators use computer software, including databases, to simulate building construction. Cost estimators often use a computer database with information on the costs of other, similar projects.

General contractors usually hire cost estimators for specific parts of a large construction project, such as estimating the cost of the electrical work or the excavation phase. In such cases, the estimator calculates the cost of the construction phase for which the contractor is responsible, rather than calculating the cost of the entire project. Construction companies will hire cost estimators that calculate the total project cost by analyzing the bids that the subcontractors’ cost estimators prepared.

Some estimators are hired by manufacturers to analyze certain products or processes.

The following are examples of types of cost estimators:

Construction cost estimators estimate the cost of construction work. They may, for example, estimate the total cost of building a bridge or commercial shopping center. They may identify direct costs, such as the cost of raw materials and the cost of labor, and set a timeline for how long the project will take. Although many work directly for construction firms, some work for contractors, architects, and engineering firms.

Manufacturing cost estimators calculate the costs of developing, producing, or redesigning a company’s goods or services. For example, a cost estimator working for a home appliance manufacturer may determine whether a new type of dishwasher will be profitable to manufacture.

Some manufacturing cost estimators work in software development. Many high-technology products require a considerable amount of computer programming, and calculating the costs of software development requires great expertise.

Two other groups also estimate costs in their jobs: operations research analysts and construction managers may do significant amounts of cost estimating in the course of their usual duties.

Work Environment

Cost estimators
Cost estimators visit construction sites to gather information.

Cost estimators held about 202,200 jobs in 2012. The industries that employed the most cost estimators in 2012 were as follows:   

Construction of buildings16%
Building equipment contractors16
Manufacturing14
Foundation, structure, and building exterior contractors8

Although cost estimators work mostly in offices, they often visit construction sites and factory floors. Depending on the industry, these visits may involve frequent travel.

Cost estimators need to meet deadlines in order to prepare bids. Inaccurate estimates can cause a firm to lose a bid or to lose money on a job that otherwise could have been profitable.

Work Schedules

Cost estimators usually work full time. Some, however, are required to work overtime in order to meet deadlines.

How to Become a Cost Estimator

Cost estimators
Cost estimators often present their work to clients.

A bachelor’s degree is generally required for someone to become a cost estimator. However, a few highly experienced construction workers may qualify without a bachelor’s degree.

Education

Increasingly, employers prefer candidates who have a bachelor’s degree. A strong background in mathematics is essential.

Construction cost estimators generally need a bachelor’s degree in an industry-related field, such as construction management, building science, or engineering. Those interested in estimating manufacturing costs typically need a bachelor’s degree in engineering, physical sciences, mathematics, or statistics. Some employers accept candidates with backgrounds in business-related disciplines, such as accounting, finance, and business.

Training

Newly hired cost estimators may receive some on-the-job training based on their prior experience. Training often includes learning a company’s cost-estimating software and techniques.

Work Experience in a Related Occupation

Increasingly, employers prefer that cost estimators—particularly those without a bachelor’s degree—have previous work experience in the construction industry. For example, experienced electricians and plumbers can become construction cost estimators if they have the necessary construction knowledge and math skills.

Candidates interested in becoming cost estimators also can gain experience through internships and cooperative education programs.

Licenses, Certifications, and Registrations

Voluntary certification can show competence and experience in the field. In some instances, employers may require professional certification before hiring. The American Society of Professional Estimators, the Association for the Advancement of Cost Estimating International (also known as AACE International), and the International Cost Estimating and Analysis Association each offer a variety of certifications.

To become certified, estimators generally must have at least 2 years of estimating experience and must pass a written exam.

Important Qualities

Analytical skills. Accurately evaluating detailed specifications is crucial to a cost estimator’s success. For example, a cost estimator must determine how to minimize costs without sacrificing quality.

Detail oriented. Cost estimators must pay attention to small details because such details may have a large impact on a product’s overall cost.

Technical skills. Detailed knowledge of industry processes, materials, and costs are vital to estimators. In addition, they should be able to use specialized computer programs to calculate equations and handle large databases.

Time-management skills. Because cost estimators often work on fixed deadlines, they must plan their work in advance and work efficiently and accurately.

Writing skills. Cost estimators must be able to write detailed reports. Often, these reports determine whether or not contracts are awarded or products are manufactured.

Pay

Cost Estimators

Median annual wages, May 2012

Business operations specialists

$62,230

Cost estimators

$58,860

Total, all occupations

$34,750

 

The median annual wage for cost estimators was $58,860 in May 2012. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $34,520, and the top 10 percent earned more than $96,670.

Cost estimators usually work full time. Some, however, are required to work overtime in order to meet deadlines.

Job Outlook

Cost Estimators

Percent change in employment, projected 2012-22

Cost estimators

26%

Business operations specialists

13%

Total, all occupations

11%

 

Employment of cost estimators is projected to grow 26 percent from 2012 to 2022, much faster than the average for all occupations.

Demand for cost estimators is expected to be strong because companies need accurate cost projections to ensure that their products and services are profitable. For this reason, cost estimators are essential to companies.

Growth in the construction industry will create the majority of new jobs. In particular, the construction and repair of infrastructure, including roads, bridges, airports, and subway systems, will drive demand for qualified estimators.

Job Prospects

Rapid employment growth should result in good job prospects overall. Those with a bachelor’s degree and excellent math skills will have the best job opportunities.

In manufacturing, those who have a strong background in mathematics, statistics, or engineering and previous experience with cost estimation software should have the best job prospects.

In construction, those with knowledge of building information modeling software are likely to have the best job prospects. Jobs of cost estimators working in construction, like those of workers in many other trades in the construction industry, are sensitive to changing economic conditions.

Employment projections data for Cost Estimators, 2012-22
Occupational Title SOC Code Employment, 2012 Projected Employment, 2022 Change, 2012-22 Employment by Industry
Percent Numeric

SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program

Cost estimators

13-1051 202,200 255,200 26 53,000 [XLS]

Similar Occupations

This table shows a list of occupations with job duties that are similar to those of cost estimators.

Occupation Job Duties ENTRY-LEVEL EDUCATION 2012 MEDIAN PAY
Accountants and auditors

Accountants and Auditors

Accountants and auditors prepare and examine financial records. They ensure that financial records are accurate and that taxes are paid properly and on time. Accountants and auditors assess financial operations and work to help ensure that organizations run efficiently.

Bachelor’s degree $63,550
Budget analysts

Budget Analysts

Budget analysts help public and private institutions organize their finances. They prepare budget reports and monitor institutional spending.

Bachelor’s degree $69,280
Claims adjusters, appraisers, examiners, and investigators

Claims Adjusters, Appraisers, Examiners, and Investigators

Claims adjusters, appraisers, examiners, and investigators evaluate insurance claims. They decide whether an insurance company must pay a claim, and if so, how much.

See How to Become One $59,850
Construction managers

Construction Managers

Construction managers plan, coordinate, budget, and supervise construction projects from development to completion.

Bachelor’s degree $82,790
Financial analysts

Financial Analysts

Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.

Bachelor’s degree $76,950
Financial managers

Financial Managers

Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.

Bachelor’s degree $109,740
Industrial production managers

Industrial Production Managers

Industrial production managers oversee the daily operations of manufacturing and related plants. They coordinate, plan, and direct the activities used to create a wide range of goods, such as cars, computer equipment, or paper products.

Bachelor’s degree $89,190
Suggested citation:

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2014-15 Edition, Cost Estimators,
on the Internet at http://www.bls.gov/ooh/business-and-financial/cost-estimators.htm (visited October 01, 2014).

Publish Date: Wednesday, January 8, 2014