The map of factors
Cost variation factors fall into four planes, from the most visible to the most technical. The order matters, because the first two planes are negotiated and the last two are calculated.
The geographic plane. Labour, transport, waste management and local demand pressure vary between regions and, within them, between capitals and rural areas. Madrid, Barcelona and the archipelagos consistently top the scale. It is the most cited factor and, paradoxically, not the heaviest: its effects rarely exceed 20 %, while quality level can move twice as much.
The project plane. Quality and specification level, geometry and compactness, size of the operation and plot conditions. This is the plane where the designer has real room for action: the same programmed floor area can be budgeted with differences of 30 or 40 % depending on design decisions.
The time plane. Material and labour prices evolve, sometimes sharply. Every ratio carries a date, and using figures from another year without correcting them is one of the most frequent sources of error in early studies.
The price formation plane. Between the direct cost of the work items and the final price stand the site indirect costs, the contractor's overheads and industrial profit, and then the whole chain of development costs. Ignoring this mechanism leads to comparing figures that do not measure the same thing.
| Plane | What it covers | Typical spread on the ratio | Where it is decided |
|---|---|---|---|
| Geographic | Labour, transport, waste, local demand | Up to 20 per cent | Taken as a given of the location |
| Project | Quality level, geometry, size, plot | 30 to 40 per cent | Design and brief decisions |
| Time | Movement in materials and labour | Varies with the interval | Updating with cost indices |
| Price formation | Indirect costs, overheads, industrial profit | The 13+6 convention on the PEM | Contract and development chain |
The four analyses in this branch
Regional construction cost differences in Spain. The geographic plane in detail: the real magnitude of the Madrid and Barcelona premiums, the particular case of the islands, and how to carry a ratio from one area to another without manufacturing errors.
Indirect costs and overheads in the works budget. Price formation on the contractor's side: what site indirect costs are, what overheads and industrial profit cover, and why an aggressive discount at tender usually resurfaces later as change orders.
Cost indices: how to update a budget. The time plane: which index sources exist, how to apply an update correctly and where the exercise reaches its limits when many years have passed.
From PEM to total cost: what each budget level includes. The complete chain of levels: PEM (direct works budget), contract budget and total development cost, with the usual percentages of each link and the checks to run before comparing any two budgets.
How to use this map in practice
Faced with an early study, the effective working order runs through the four planes in sequence. First fix the scope and budget level (fourth plane), because without that no figure is comparable. Then select the typology range and correct it by area (first plane) and by date (third plane). Finally, position the project within the range according to its quality, geometry and plot (second plane), which is where the real precision of the framing is decided. An early study that documents these four decisions can be defended before the client even if the final figure evolves; one that gives a figure without a scope never can.
Note: indicative ranges and percentages for Spain in 2026, variable by region, project and market.