What does the term ‘hard costs’ refer to?

The term ‘hard costs’ specifically refers to the direct expenses involved in the physical construction of a project. This includes costs associated with construction materials, labor, and any other elements directly tied to the building process. Hard costs are tangible expenditures that can be physically quantified, such as concrete, steel, plumbing fixtures, and the wages of the workers who install these materials.

Understanding hard costs is crucial for budgeting and financial planning in construction projects. Accurately estimating these costs helps contractors determine the overall project price and ensures that sufficient funds are allocated to complete the work as required. This notion contrasts with other types of costs, such as indirect costs related to project management, financing, or administrative functions, which do not directly impact the construction of the physical structure itself.