Basics of a Cost Estimator

A Cost Estimator uses data analysis to calculate price tags. Their skills determine the value of time, money, materials, and labor. Put together, these individual costs help predict bottom lines – key for businesses of every kind.

What Is Cost Estimation?

While cost estimators do use math there is more to the art and science of cost estimation. Cost estimation is part of the cost engineering profession. i It involves both high level conceptual estimates and detailed level estimates. These forecasts help vendors and contractors work with managers and clients on things such as: I

  • Budget
  • Performance of any project
  • Project scope - Work Breakdown Structure (WBS) & Cost Breakdown Structure (CBS)
  • Assumptions - Basis of Estimate (BOE)

preparing for a career as a cost estimator

With applications for products, services and construction, many cost estimators choose a niche. This is particularly helpful when it comes to learning industry-specific software and other methods. For example, this may include:

  • Building information modeling (BIM)
  • Computer-aided design (CAD)
  • Accounting and statistics

What Degree Do I Need for a Career in Cost Estimation?

Launching a career as a cost estimator often requires a Bachelor degree. Also, employers often prefer candidates with a background in an industry-related field. Experience and on-the-job training are also valued.ii

To determine which degree route to go, you might consider the following 7 career paths and some suggestions for choosing an online degree program. ii

1. Construction Cost Estimators 

Construction cost estimators typically need a bachelor’s degree in construction management or engineering. iii There are also universities with master’s degree programs in construction management. These may prepare graduates to lead and handle more complex projects.

As a construction cost estimator, one may calculate anything from building a road or bridge to a shopping center or house. Construction cost estimators also assess costs of raw materials and labor and set time lines for project completion. Many work directly for construction firms, some work for contractors and engineering firms. iii

Fast Facts

Average annual salary May 2017: $66,250 vi

Employment growth (2016 to 2026): 11% (faster than average) vii

2. Manufacturing Cost Estimators

Manufacturing cost estimators typically need a bachelor’s degree in engineering, business, or finance. iii

As a manufacturing cost estimators one may compute the costs to develop, produce or redesign any goods or services. For example, a cost estimator working for an auto manufacturer may assess a new car model’s production cost. This allows managers to make informed production decisions. iii

Fast Facts

Average annual salary May 2017: $60,440 vi

Employment growth (2016 to 2026): 11% (faster than average) vii

3. Budget Analysts

Budget analysts typically have a bachelors degree in accounting, finance, business, public administration, economics, statistics, political science or sociology iv

As a budget analyst, one needs strong numerical and analytical skills. Studies often center around courses in accounting, economics and statistics.

Government budget analysts may also earn the Certified Government Financial Manager credential from the Association of Government Accountants. Maintaining said credential requires 80 hours of continued education every 2 years. iv

Fast Facts

Average annual salary May 2017: $75,240v

Employment growth (2016 to 2026): 7% (as fast as average) viii

4. Operations Research Analysts

Many operations research analysts today have a masters degree in engineering, computer science, analytics, or mathematics. Entry-level education is a bachelors degree. ix

As an operations research analyst, one often identifies and solves problems with advanced math, statistics and (computer) analytics. The skills of operations research analysts are used in areas such as business, logistics and health care. 

Fast Facts

Average annual salary May 2017: $81,390 x

Employment growth (2016 to 2026): 27% (much faster than average) xi

5. Accountants and Auditors

Accountants and auditors may get started with a bachelors degree. However, to bridge the gap of credits needed to pursue a Certified Public Accountant (CPA) credential, many pursue a Masters in Accounting or MBA. xii

As an accountant, one may assess and prepare taxes and financial records. This works to ensure the financial health of businesses and organizations. Also, within this dynamic field, many accountants choose a niche within which to apply their skills. Forensic accounting and cost accounting are two examples.

Many accredited colleges and universities offer concentrations so that students may line up studies with interests.

Fast Facts

Average annual salary May 2017: $74,140 xii

Employment growth (2016 to 2026): 10% (faster than average) xiii

6. Logisticians

Some logisticians may get started with an associates degree. However, due to the complexity of supply chains, a bachelors degree in business, systems engineering, or supply chain management is more common. xiv Masters and MBA in SupplyChain Management are also available.

Logisticians understand how to analyze and coordinate an organization’s supply chain. These individuals manage the entire life cycle of a product from design to disposal.

Fast Facts

Average annual salary May 2017: $74,590 xv

Employment growth (2016 to 2026): 7% (about as fast as average) xvi

7. Financial Managers

Financial managers often have at least a bachelor's degree in finance, accounting, economics, or business administration. Investment professionals who strive to attain industry certification such as Chartered Financial Analyst (CFA) need at least a bachelors degree as well. xvii

Today’s employers also seek financial managers a masters degree in business administration, finance, accounting, or economics. These graduate programs may help students develop deeper analytical skills. They might also instruct students in more advanced financial analysis methods and related software. xvii

Fast Facts

Average annual salary May 2017: $125.080 xvii

Employment growth (2016 to 2026): 19% (faster than average) xvii

Meet Your Potential As a Cost Estimator

Boost your skills and knowledge in cost estimation online. Many accredited colleges and universities offer online degrees in the areas discussed in this article. Online degrees add a level of convenience for the at-work professional or busy adult learner. Use the tools on this page to get matched with a school, subject, degree and format today.

[i] http://www.costmanagement.eu/blog-article/what-is-cost-estimation-we-explain-it-to-you-in-4-steps | [ii] https://www.bls.gov/ooh/business-and-financial/cost-estimators.htm#tab-4 | [iii] https://www.bls.gov/ooh/business-and-financial/cost-estimators.htm#tab-2 | [iv] https://www.bls.gov/ooh/business-and-financial/budget-analysts.htm#tab-4 | [v] https://www.bls.gov/ooh/business-and-financial/budget-analysts.htm#tab-5 | [vi] https://www.bls.gov/ooh/business-and-financial/cost-estimators.htm#tab-5 | [vii] https://www.bls.gov/ooh/business-and-financial/cost-estimators.htm#tab-6 | [viii] https://www.bls.gov/ooh/business-and-financial/budget-analysts.htm#tab-6 | [ix] https://www.bls.gov/ooh/math/operations-research-analysts.htm#tab-4 | [x] https://www.bls.gov/ooh/math/operations-research-analysts.htm#tab-5 | [xi] https://www.bls.gov/ooh/math/operations-research-analysts.htm#tab-6 | [xii] https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm#tab-4 | [xii] https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm#tab-5 | [xiii] https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm#tab-6 | [xiv] https://www.bls.gov/ooh/business-and-financial/logisticians.htm#tab-4 | [xv] https://www.bls.gov/ooh/business-and-financial/logisticians.htm#tab-5 | [xvi] https://www.bls.gov/ooh/business-and-financial/logisticians.htm#tab-6 | [xvii] https://www.bls.gov/ooh/management/financial-managers.htm#tab-6