Supplier structure and housing construction costs

Causes of construction cost escalations can be numerous and any effort to ascertain them in order to explain regional disparities requires that all the major construction cost components affected by the increase must first be recognized. Imprecise concepts and categories as well as mix-up of what constitutes cost or price makes it difficult to systematically identify these cost constituents. The aim of this paper is to synthesize these concepts and systematize the factors that determine construction cost factors in a way that makes it easier to tackle the issue of Swedish regional construction cost escalation differences. The factors influencing construction costs were divided into four groups/layers based on the extent to which the construction actors, especially contractors and clients, could influence the factors; projectspecific factors, client-contractor related factors, competition and market conditions, and macroeconomic and political factors. Factors in the first and final groups may not contribute valuable analysis that explains the regional construction costs differences. The other two groups of factors; client and contractor-related factors and competition and market conditions could have huge influences on construction costs and hence could explain different construction costs increase observed between metropolitan and smaller regions in Sweden.

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