1. What a construction economist actually does
The construction economist is the professional who translates an architectural brief into costs, monitors how those costs move throughout the project, and helps the client take informed decisions at each step. The assignment covers the whole life of the project.
| Stage | Principal assignment | Deliverable | Value added |
|---|---|---|---|
| Feasibility | Estimate of the global envelope | A ratio or band at ± 25–35 % | Confirms or rejects economic feasibility before commitment |
| Concept and outline | Outline estimate by trade | Pricing at ± 15 % plus contingency | Checks, before the planning application, that the project fits within the envelope set by the client |
| Competition | Economic assessment of the schemes | A comparison of the schemes' costs on the same basis, in whole-life cost, without ranking | Informs the jury, which ranks the schemes; the client chooses the winner in the light of the minutes and the opinion of the jury |
| Developed design | Detailed measure by package | Draft specification and pricing schedule at ± 8 % | Confirms economic feasibility before tender |
| Tender and award | Pricing schedules, bills, tender analysis | An award report with a recommendation | Detects under-pricing and price anomalies |
| Construction | Financial monitoring of the contracts | A variations dashboard and provisional final account | Controls drift in real time |
| Handover | The definitive final account, claims | The final account | Secures the financial closure of the site |
| One-off | Second opinion or counter-expertise | A summary note with conclusions | Confirms or challenges an existing estimate |
The economist is not the site's bookkeeper, they are its financial architect
A frequent confusion reduces the economist to a checker of invoices or a producer of spreadsheets. The real role is far more strategic: they are the person who tells the client, at feasibility, whether the project is financially viable, before the architect has drawn a single line.
An economist brought in at the right stage, before the planning application rather than after the contracts are signed, can save 5 to 20 % of the total budget. One brought in too late can only record the damage.
2. In-house or external: choosing by situation
Large developers and public authorities often have in-house economists, salaried professionals who know the organisation's recurrent building types. The external economist brings independence, specialisation in rarer types, and availability on demand. The choice is not binary; the two complement each other.
| Situation | In-house economist | Independent external economist | Recommendation |
|---|---|---|---|
| A recurrent programme on a familiar type | ✔ Sufficient | Not needed | In-house, if the database is current |
| A first programme on a new type | Insufficient alone | ✔ Indispensable | External, to calibrate the ratios |
| A second opinion on an estimate | Potential conflict of interest | ✔ Indispensable | External, to guarantee independence |
| A project in an unfamiliar area | Risk of unsuitable ratios | ✔ Recommended | External, with knowledge of the local market |
| An architectural competition with several schemes | Limited if the volume is large | ✔ Recommended | External, to assess in parallel |
| A large programme (above 10 M€ of works excl. VAT, an indicative threshold adopted by this page) | Risky with a single in-house resource | ✔ Recommended | External, for independent verification |
| Litigation or expert determination | ✘ Inadmissible | An expert appointed by the court, if it orders an expert report | A person on the national list or on that of a court of appeal, or any other person the court chooses (Law no. 71-498 of 29 June 1971, art. 1 and 2) |
| Urgency, under 72 working hours | Often unavailable | ✔ Recommended | External on demand |
The independence rule: when in-house is not enough
In three situations the in-house economist cannot fulfil the assignment: a second opinion on an estimate produced by a team they belong to, which is a conflict of interest; litigation with a contractor, where the court expert, whom the court appoints from a list of experts or outside it under article 1 of Law no. 71-498 of 29 June 1971, must be independent; and unusual building types on which the in-house team has no current references. In those cases the external economist is not a luxury, it is the only way to obtain an analysis credible and defensible before funders, insurers or a court.
3. What an economist costs and what they return
The most frequent objection to bringing in an external economist is the cost. That objection disappears once set against what the economist prevents or generates.
| Service | What it prevents or generates | Typical return |
|---|---|---|
| Outline estimate, works under 3 M€ | Avoids a 15–20 % under-estimate, at least 450 k€ | × 100 to 250 |
| Outline estimate, works 3–10 M€ | Avoids a 10 % overrun, at least 500 k€ | × 100 to 250 |
| Full monitoring assignment on 10 M€ | Avoids 4–8 % of variation overrun, 600 k€ | × 3 to 5 |
| Second opinion on an estimate | Detects under- or over-pricing of 5–15 % | × 15 to 50 |
| Tender analysis | Detects anomalies, saves 2–5 % in negotiation | × 5 to 20 |
| Feasibility second opinion | Confirms or rejects an investment decision | Incalculable if a no-go is avoided |
The most telling case is the feasibility second opinion: a marginal cost to confirm or reject an investment decision worth several million. If the economist concludes no-go on an unviable project, they have just saved the entire cost of the operation. That return is by definition incalculable, but it alone justifies bringing in an external economist systematically at feasibility.
4. The five situations where an external economist is indispensable
1. A first operation on a new building type
A residential developer launching their first student residence, a social landlord building their first care home, an authority delivering its first community pool: in these cases the in-house ratios are non-existent or unsuitable. The external economist brings a database of current references for the type concerned, avoiding the initial under-budgeting that invariably leads to overrun.
2. A second opinion before an investment decision
Before approving an operation budget presented by a developer, an architect or an internal team, the client is well advised to commission an independent second opinion. The cost is marginal and the potential benefit considerable: detecting a deliberate or inadvertent under-estimate before commitments are made.
3. Tender analysis at the award stage
Tender analysis is a critical moment often neglected. An abnormally low offer on a package can mean undeclared subcontracting, non-compliant materials, or simply a pricing error by the contractor that will surface as massive variations during construction. The external economist analyses the offers with an independent eye, compares them item by item, and detects the anomalies before the contracts are signed.
4. A project in an unfamiliar area
An in-house economist whose reference database is built on projects in the Paris region or a regional city does not have the right factors to price a project in Corsica, the overseas territories or a mountain area. An external economist specialised in the area brings current local market references, irreplaceable for a reliable estimate.
5. Urgency
When an estimate is needed faster than a busy in-house team can deliver, an economist on demand is the only solution. That is the case when submitting a bid, answering a funding partner or clearing an investment committee.
5. How to choose a good external economist
- Specialisation by building type. An economist specialised in apartments does not necessarily know the costs of a cold store or a care home. Check the references on the type concerned before commissioning.
- Knowledge of the local market. Ratios vary by 15 to 60 % with the area. A Paris economist pricing a Martinique project without local references will produce an inaccurate estimate. Check the geographic coverage.
- Independence. An economist tied to an architect, a developer or a contractor is not in a position of independence to produce a credible second opinion. Independence is a non-negotiable condition for second-opinion and expert work.
- Responsiveness. In urgent situations, the ability to deliver within 72 hours is as important a criterion as the precision of the estimate. A perfect estimate delivered after the deadline is of no use.
- Methodological transparency. A good estimate is not a black box: it documents the assumptions, the ratios used, the sources and the contingencies. That transparency lets the client understand the figures and argue them.
In summary
An external economist is not indispensable on every project, but is the best investment available in five precise situations: a first operation on a new building type, a second opinion before an investment decision, tender analysis, a project in an unfamiliar area, and urgency. The cost is marginal against what it prevents: an outline estimate that avoids a 150,000 € overrun returns a hundredfold. The golden rule is simple: come in early. An economist consulted at feasibility can change the investment decision. An economist consulted during construction can only record what has happened.
The nature of the figures quoted
The percentages and amounts quoted on this page are orders of magnitude for framing, not measurements. They illustrate mechanisms and proportions, and they substitute neither for a tender exercise nor for an estimate prepared on drawings.
Sources: the BT construction cost indices published monthly by INSEE on its 2010 base, used to update the figures · construction cost statistics from SDES, the statistical service of the ministry responsible for construction · regulatory texts published in the Journal officiel and consolidated on Légifrance for the requirements cited.