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Home / Glossary / Rate Analysis
Glossary

What is rate analysis in construction estimating?

Rate analysis is the build-up of the unit rate for one item of work from its parts, material, labour and machinery for a unit quantity, plus an allowance for the contractor’s overheads and profit.

Rate Analysis explained

To analyse the rate of, say, one cubic metre of brickwork, an estimator lists the bricks, cement, sand, mason and helper time needed per cubic metre, prices each one, adds wastage, then adds overheads and profit.

Rate analysis shows why one contractor’s rate for an item differs from another’s, and lets you re-price an item when one input, such as cement, changes.

Government departments publish standard analyses of rates; private firms keep their own and update them as material and wage rates change.

How ARC PEM helps

Rates you settle on can be stored in reusable BOQ templates, and the vendor bills and labour wages you record show how actual costs compare with them. See all features.

Frequently asked questions

What is included in a rate analysis?
Material, labour and machinery for a unit quantity of work, wastage, and an allowance for the contractor’s overheads and profit.
Why do contractors’ rates for the same item differ?
Because material sourcing, wage rates, productivity, overheads and profit expectations differ. A rate analysis makes those differences visible.

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