How costs differ by location, from recorded regional factors.
Costing and commercial control. 5 questions answered below, each with the arithmetic behind it and the limits of what the tool decides. Open the Regional Cost Index tool.
The same building costs different amounts in two cities, and the difference is not the design. Labour rates, material haulage, local levies and the depth of the subcontractor market all move the number, and a national average hides all of it. The regional index applies those differences to a measured estimate. The index is a set of relative factors per region and per trade, applied to a base estimate rather than replacing it. What it will not do is convert currency, because a currency conversion and a regional cost difference are two different adjustments, and combining them produces a figure that answers neither question. Where a region has no factor, the tool reports it rather than applying the national figure as if it were local.
An estimate of a hundred thousand at base, moved to a region with a labour factor of one point one five and a material factor of one point zero five, is adjusted trade by trade rather than as a single multiplier. A labour heavy job therefore moves more than a material heavy one, which is the point of keeping the factors apart. If the same job is being priced in another currency, that is a separate conversion applied afterwards, at a rate that is stated.
A relative factor, by region and by trade, applied to a measured estimate. Labour and material factors are separate because they move for different reasons, so a labour heavy job adjusts differently from a material heavy one. The base and the adjusted figures stay side by side, which means the adjustment can be seen rather than absorbed.
From recorded regional differentials, which are relative rather than absolute prices. That matters because a factor survives a change in the base estimate, while a set of local prices would have to be replaced every time a quantity changed. The date of the factors is recorded, since a differential narrows or widens over time.
No, and deliberately not. A currency conversion and a regional cost difference are different adjustments, and applying both through one factor produces a number that mixes two movements. The regional index adjusts for where the work is, and a currency conversion is applied afterwards at a stated rate, so each change can be seen and questioned on its own.
Because a national figure is a fiction that is convenient for a spreadsheet. Labour in one region can differ from another by a third, and haulage and local levies add further variation. A contractor pricing a job a long way from home needs to know what the local cost base is, and a client comparing two locations needs the same. The regional index gives both a way to have that conversation with a number in front of them rather than a hunch about the other side of the country.
Yes, where the estimate is held and the region is known. The factor is applied to the measured quantities rather than to the total, so a change of region produces a re priced estimate rather than a scaled number. That keeps the traceability of the original lines and makes the regional adjustment one more visible step rather than a mystery. Where a client queries the difference between two locations, the answer is a factor and a date rather than an apology.