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Reasons Why Construction Projects Exceed Budgets

El-Alan Construction Company

When we talk about construction, we advise our clients on the importance of having an extra budget that can cover any irregularity or uncertainty during the project’s commencement, even after its completion.

Regardless of the project type, it would help if you were always prepared for sudden reality. Here are the top reasons why the majority of the construction projects exceed their budgets:

Wrong forecasts

Every construction project needs a solid foundation with a well-written budget and specifications. With so many moving parts across the lifetime of a project, failure in nailing down a properly costed plan results in the risk of confusion, disputes, and mistakes.

Labor costs

Labor costs are one big headache. It becomes a significant challenge to find out a quality workforce. Three-quarters of firms say bricklayers and supervisors are challenging to recruit, with joiners/carpenters and ceiling fixers not far behind. A tight labor market may force up construction costs.

Improper communication

Inconsistencies while reporting often mean that neither the owners, contractors nor subcontractors know about the project faring at the given time. It makes a tricky situation when a delay and problem leads to cost overruns and delays.

Inefficient payment process

The application of the payment function is one critical element of the construction process. Application, approval, and certification are practical keys to getting paid.

Subcontractor issues

They are the cement that holds up the project together. If they fail to deliver the consequences, they can be far-reaching. More often, relationships break down only due to poor management by the contractor.


Construction projects may exceed the budget, but if both the owners and constructors sign up with the right mindset, there would not be a hassle. A contractor must inform the client beforehand about the unexpected incurring costs to be prepared for the exceeding budgets.

However, in any case, both parties must have an excellent understanding to make things work out.

If you are looking for the best construction company in Nigeria, Elalan is the right choice for you.

El-Alan Construction Company
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