What is an estimate in construction terms?

In construction terminology, an estimate refers to a calculation of potential future costs associated with a project. This encompasses not just labor and materials, but also equipment, overhead, and other expenses that may arise throughout the construction process. Estimating is a fundamental practice that helps project managers and stakeholders understand the financial requirements and budget expectations before work begins.

In this context, options that focus on specific financial transactions or stages—such as final payments to the contractor or budget set for materials only—do not capture the broader purpose of estimation. Additionally, progress payments are payments made during the course of a project based on work completed, rather than an initial assessment of costs. Therefore, defining an estimate as a calculation of potential future costs is the most accurate representation of its role in construction.