CEM400: Construction Economics and Cost Management

Module code: CEM400

Module provider: School of Construction Management and Engineering, School of Built Environment

Credits: 20

Level: Postgraduate Masters

When you'll be taught: Semester 2

Module convenor: Professor John Connaughton, email: j.connaughton@reading.ac.uk

Module co-convenor: Dr Upeksha Madanayake, email: u.h.madanayake@reading.ac.uk

Pre-requisite module(s):

Co-requisite module(s):

Pre-requisite or Co-requisite module(s):

Module(s) excluded:

Placement information: NA

Academic year: 2024/5

Available to visiting students: Yes

Talis reading list: Yes

Last updated: 11 November 2024

Overview

Module aims and purpose

For Construction Economics, the Module aims to provide participants with an understanding of how the conceptual framework of economic analysis can help to address a wide range of practical problems and questions encountered in the modern construction industry.

For Construction Cost Management, the Module aims to equip the students with the skills and knowledge to estimate, plan, manage, control and engineer building costs across all stages of the development process: from financial feasibility appraisal, design, construction procurement, construction operations, commissioning, maintenance, refurbishment to demolition.

Module learning outcomes

By the end of the module, it is expected that students will be able to:

• Understand construction as an important sector of national and global economies, including how it performs as an economic sector in its own right 
• Understand construction as an economic process, including the nature of construction demand and how the construction market operates
• Use important economic analysis frameworks and tools for the appraisal of investment at the project level and at the level of competing construction approaches/technologies
• Understand the various principles, techniques and standard methods of measurement and the practices of quantification, definition and costing of construction works, and apply the understanding of how these are appropriately used at different stages of the construction process
• Understand the concepts of financial cost, price and value regarding construction and building development and to apply the techniques of cost estimating, cost planning, cost management and cost control in construction development and operations

Module content

For Construction Economics, the Module is organised into three broad levels of economic analysis/reporting, as follows: 

• Macroeconomics – dealing with markets and trends at the global/national scale; the influence of national economic (fiscal and monetary) policy on construction; the nature of construction demand and current property investment preferences. 
• Mesoeconomics – dealing with the construction sector, its structure and performance compared to other sectors of economic activity; how the construction market works and the importance of the price determination process; current and likely future trends in output, employment and prices. 
• Microeconomics – dealing with the performance and behaviour of construction firms (contracting and professional service firms); the economics of development and construction projects; investment appraisal techniques and approaches.   

In addition, lectures will cover the typical economic data requirements of practicing project/construction/construction cost managers, including uses and interpretation of available economic indicators and sources and limitations of data. 

For Construction Cost Management, the Module will cover: 

• Construction engineering cost factors: Techniques for mensuration, quantification, and definition of construction works. 
• Cost Management at project inception and design stage: Cost modelling and forecasting, approximate estimating, cost planning of design and cost control systems. 
• Design economics, value management and whole life costing: Time value of building and building component costs, micro-economics of building development ownership and occupation, obsolescence and deterioration of buildings, life cycle cost analysis and planning. 

Structure

Teaching and learning methods

For Construction Economics, teaching and learning methods will be a combination of formal lectures, workshop sessions, case studies, group exercises and discussions, and private study.  A feature of this module is the participation of a number of external lecturers who are expert practitioners in different aspects of construction economics, including analysis, forecasting and the business uses of economic data.   

For Construction Cost Management, the Module will be delivered by lectures, tutorial discussions and the undertaking of practical tasks on cost management and cost engineering. Some lectures will be given by specialist experts in aspects of construction cost management. 

Study hours

At least 24 hours of scheduled teaching and learning activities will be delivered in person, with the remaining hours for scheduled and self-scheduled teaching and learning activities delivered either in person or online. You will receive further details about how these hours will be delivered before the start of the module.

Please note the independent study hours above are notional numbers of hours; each student will approach studying in different ways. We would advise you to reflect on your learning and the number of hours you are allocating to these tasks.

Semester 1 The hours in this column may include hours during the Christmas holiday period.

Semester 2 The hours in this column may include hours during the Easter holiday period.

Summer The hours in this column will take place during the summer holidays and may be at the start and/or end of the module.

Assessment

Requirements for a pass

Students need to achieve an overall module mark of 50% to pass this module.

Summative assessment

Penalties for late submission of summative assessment

The below information applies toall full time and flexible modularstudents on taught PGT programmes in SBE

The Support Centres will apply the following penalties for work submitted late:

Assessments with numerical marks

• where the piece of work is submitted after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for that piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of three working days;
• the mark awarded due to the imposition of the penalty shall not fall below the threshold pass mark, namely 40% in the case of modules at Levels 4-6 (i.e. undergraduate modules for Parts 1-3) and 50% in the case of Level 7 modules offered as part of an Integrated Masters or taught postgraduate degree programme;
• where the piece of work is awarded a mark below the threshold pass mark prior to any penalty being imposed, and is submitted up to three working days after the original deadline (or any formally agreed extension to the deadline), no penalty shall be imposed;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

Assessments marked Pass/Fail

• where the piece of work is submitted within three working days of the deadline (or any formally agreed extension of the deadline): no penalty will be applied;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension of the deadline): a grade of Fail will be awarded.

The University policy statement on penalties for late submission can be found at: https://www.reading.ac.uk/cqsd/-/media/project/functions/cqsd/documents/qap/penaltiesforlatesubmission.pdf

You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Formative assessment

Formative assessment is any task or activity which creates feedback (or feedforward) for you about your learning, but which does not contribute towards your overall module mark.

Construction Economics 

In-class tasks/ exercise will follow key lessons, for which model answers shall be provided and discussed.   

Construction Cost Engineering 

Each lesson will follow an in-class task/ exercise, for which model answers shall be provided and discussed.   

Reassessment

Additional costs