Causes of Budget Changes in Building Construction Projects: An Empirical Study in Taiwan

Jyh-Bin Yang and Chien-Chung Chen

The Engineering Economist, 2015, vol. 60, issue 1, 1-21

Abstract: Most contractors pay close attention to managing costs due to the direct impacts of cost overruns on their profits. Contractors often cannot effectively control the costs of a construction project due to inaccurate budget allocation, resulting in unsuccessfully forecasting project profits or losses until the project's completion. This study analyzed three real cases and utilized a questionnaire survey to identify the main causes of budget changes in building construction projects in Taiwan. Research results reveal that “client changes,” “inaccurately estimated quantities,” and “unclear drawings and specifications” are the main causes of budget changes. These results provide not only a means of correcting the causes of inaccurate budget allocation but also a measure for project managers to review and control their project costs, which is important to a contractor during a low-profit era.

Date: 2015
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DOI: 10.1080/0013791X.2013.879972

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