Construction Cost Overrun Statistics: A Must Know (2024)
The construction projects often face significant cost overruns as it impacts budgets and timelines. But just how common are these overruns, and what causes them?
With that in mind, we’ll cover key construction cost overrun statistics that show the frequency, causes, and average increases of construction costs across various projects.
Construction Cost Overrun Statistics: Key Numbers
- 9 out of 10 construction projects experience cost overruns, with an average overrun of 28%.
- The average cost overrun for construction projects is 15% to 28%.
- 32% of construction cost overruns are due to estimating errors.
- Large construction projects can be up to 80% over budget and take up to 20% longer than expected.
- 98% of megaprojects face cost overruns or delays, and the average cost increase is 80% of the original value.
- The construction average slippage is 20 months from the original schedule.
- Construction costs in the United States rose by 4% on average in 2023.
- In 2024, construction costs are expected to increase by 3–6%.
Source: (Cycleconstruction, McKinsey, International Journal of Innovation, Management and Technology, Currie & Brown, Project Control Academy)
Top Factors in Construction Cost Overruns Statistics
Cost overruns are a common problem in construction projects and are often caused by a range of factors like flawed estimates, delivery delays, and many others. Here are the key reasons behind these overruns, according to the Project Control Academy:
- 32% of construction cost overruns are due to estimating errors.
- 27% are caused by flawed estimates.
- 12% are due to delivery delays.
- 11% are caused by field productivity issues.
- 9% are due to higher than anticipated costs.
- 6% are caused by flawed execution or contracting approach.
- 3% are due to commissioning and startup scope.
Source: Project Control Academy
Who’s Responsible for Cost Overruns in Construction?
The construction cost overruns are a common issue, but who’s responsible isn’t always clear as many factors come into play. Here’s a closer look at the main culprits in cost overruns.
- 36% of cost overruns are attributed to owners.
- 28% are due to contractors.
- 8% are caused by labor issues.
- 8% are due to equipment-related factors.
- 8% are attributed to external factors.
- 6% are caused by consultants.
- 2% are due to design issues.
- 2% are caused by project materials.
Source: Semantic Scholar
Project Size and Cost Overrun Frequency Statistics
As project size increases, so does the likelihood of cost overruns. The large projects are facing higher budget issues and are more likely to overrun. Let’s explore how often these overruns occur and by how much based on project size:
| Project Cost Range | Frequency of Overruns (%) | Average Increase in Cost (%) |
|---|---|---|
| Less than $350 million | 32% | 19% |
| $350 million – $1 billion | 41% | 26% |
| More than $1 billion | 45% | 30% |
Source: Grattan Institute’s analysis of Deloitte Access Economics Investment Monitor.
Major Projects That Went Catastrophically Over-Budget
Some of the biggest projects in history went catastrophically overbudget as the cost was far more than planned. Here are the projects that faced massive financial blowouts:
| Project Name | $ Over Budget (bn U.S. dollars) |
|---|---|
| International Space Station | 68.25 |
| Sochi Olympics | 39.00 |
| The Channel Tunnel | 21.10 |
| Three Gorges Dam | 16.18 |
| Boston’s Big Dig | 13.45 |
| London Olympics | 11.91 |
| Athens Olympics | 6.99 |
| Jubilee Line Extension | 4.11 |
| Hubble Space Telescope | 3.80 |
| Denver International Airport | 3.10 |
| Montreal Olympic Stadium | 2.96 |
| Brazil World Cup | 2.50 |
Source: Statista
