Effective operations and supply chain management are essential to helping organizations prevent disruptions in production. If you’re interested in analyzing data related to a company’s supply chain, you might want to consider a career as a cost estimator. These professionals analyze an organization’s time, material, and labor expenditures to estimate the potential total costs in providing services or producing products. Cost estimators are crucial to industries such as manufacturing and construction.
In 2020, despite the effects of the COVID-19 pandemic, fourth-quarter U.S. Gross Domestic Profit (GDP) from manufacturing totaled more than $2.2 trillion, and GDP from construction totaled $673 billion. Both industries rely on cost estimators to navigate the growing costs organizations face while ensuring they remain profitable. Understanding the role of a cost estimator can help you choose the industry where you’d like to work.
What is a cost estimator?
The primary goal of a cost estimator is to interpret and analyze data to forecast the cost of services, labor, and materials. Construction and manufacturing organizations rely on these professionals to ensure projects stay on budget. Without cost estimators, organizations may face shortfalls by underestimating the actual costs of manufacturing goods or providing services.
Cost estimators also provide organizations with strategies to reduce costs. They analyze processes and procedures and report opportunities for improvement to engineers or project managers. For example, cost estimators may analyze the various materials required to make a product, and then determine whether they can reduce costs by changing vendors without sacrificing quality.
Cost estimators often work with managers to determine how to respond to a project bid. By keeping track of their organization’s costs, estimators can develop strategies to help the business win multiple bids. They’re also responsible for determining external forces that may impact their cost estimations, including disruptions in the supply chain, inclement weather, or increases in the price of materials or labor.
Manufacturing cost estimator vs. construction cost estimator
Cost estimators primarily work in manufacturing or construction. Though the job duties in both industries are similar, the materials, systems, labor, and products being analyzed are different.
Manufacturing cost estimators have an extensive understanding of the various costs associated with a product's life cycle. For example, a manufacturing cost estimator may determine that product costs can decrease if managers are willing to implement automation, or that changing suppliers can save money during the production process. Many of them have specialized manufacturing knowledge in materials such as plastics, metals, or textiles, while others focus on various products, such as electrical equipment or appliances.
Construction cost estimators forecast how much an organization or individual will spend to construct buildings, housing, bridges, and roads. They work closely with construction and engineering firms to determine current costs and forecast future costs of raw materials like steel, lumber, and oil, as well as labor. They respond to requests for proposals (RFPs), help draft bids, and work closely with contractors and engineers to determine a project’s timeline.
Education, experience, and certificate requirements
Though it is possible to work as a cost estimator without a college education, many organizations require a degree in a related field. If you're interested in a career as a construction cost manager, you should consider pursuing a bachelor’s in engineering, construction management, mathematics, or statistics. If you’re more interested in manufacturing, you should look into a bachelor’s in engineering, statistics, accounting, or even business.
Though certification is usually not required, many construction and engineering firms prefer cost estimators to be certified, and earning additional credentials can make you more competitive. Cost estimators can earn certification from the International Cost Estimating and Analysis Association (ICEAA), the American Society of Professional Estimators (ASPE), or the Association for the Advancement of Cost Estimating International (AACE).
Alongside experience, education, and certification, cost estimators need a variety of skills to excel in this position:
● Analytical: Cost estimators must be able to evaluate data to determine future costs and inform organizations how to save money without diminishing the quality of products and services.
● Communication: Strong communication skills allow cost estimators to explain often complicated economic data to contractors, engineers, executives, and suppliers.
● Technological: Cost estimators rely on various technological systems — such as computer-aided design (CAD) and building information modeling (BIM) — to estimate building and manufacturing costs. Construction cost managers use various building software, such as ProEst, to simulate construction and help determine costs.
● Written: Construction cost estimators collaborate with engineers and contractors to respond to RFPs from prospective clients. They must accurately capture costs in written reports that convey why their company is the right candidate for a project.
Cost estimator salary
In 2019, the median annual salary for cost estimators in the United States was $65,250, according to the U.S. Bureau of Labor Statistics (BLS). The BLS also reports that in 2019, 17% worked in construction and 13% for manufacturers. Cost estimators who worked in heavy construction made 21.17% more than those in manufacturing.
Discover a rewarding career as a cost estimator
If you’re interested in a data-focused role within operations and supply chain management, a career as a cost estimator in manufacturing or construction may be right for you. The first step to making yourself a competitive candidate is the right education. Our recommendation engine analyzes your professional goals and finds the ideal program to fit your needs. With full-time, part-time, and accelerated options, your path to a new career begins here.