Cost Escalation 2022

Cost Escalation in Construction

Cost escalation has become an worldwide issue, for households, businesses, and governments alike.

The construction industry has shown it is not immune, with significant and unexpected increases to the cost of labour and material supply, and overall operating costs.  Internally, Downer New Zealand has been focused on two key areas of risk; project costs exceeding tendered allowances and contracts with commercial terms that don’t adequately cover the cost of escalation. In this whitepaper author John Oey, Chief Estimator for Transport explores the 2022 landscape for the infrastructure industry, the current approach to addressing the risk, and how we can move forward.