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STEEL CONSTRUCTION:
ECONOMIC & COMMERCIAL FACTORS

Lecture 1A.3: Introduction to Structural

Steel Costs
OBJECTIVE/SCOPE
To introduce the different factors affecting the cost of a steel construction. To show how
the factors are considered in developing a design taking into account technical and
recurrent and environmental costs.
PREREQUISITES
None.
RELATED LECTURES
Lecture 1A.1 : European Construction Industry
Lecture 1B.1: Process of Design
SUMMARY
Total costs of a steel construction are affected by technical and environmental factors and
recurrent costs. The steel costs, the energy, maintenance, adaptability and end of life costs
must all be appreciated from the very beginning of a project in order to lead to a well
designed construction, which meets the requirements of the client. Different parameters
such as speed of construction, or choice of foundations are studied so that they may be
taken into account in the design of the construction and in determining its cost. Secondary
activities such as erection, fabrication and protection against corrosion and fire complete
this analysis.

1. INTRODUCTION
Costs of construction works can be considered in various categories. Technical costs,
relating to material and labour in completing the project, are those which can most easily
be quantified. Recurrent costs should also be considered in studying whole life economics,
and again these can be estimated. Environmental costs are more difficult to establish; there
are signs that an environmental audit will increasingly be required as a part of the
consideration given to proposed projects. Environmental aspects can be considered in

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terms of local and global effects and include issues such as appearance, safety, local
economics, use of natural resources, and energy consumption.
This lecture concentrates on the technical costs of steel construction. It deals with the topic
in a broad way. Whole life costing is dealt with first before examining the costs of
execution, which are concerned initially with total construction, leading onto structural
costs and finally economic considerations applied to individual activities such as
fabrication and erection. This sequence has been chosen deliberately to emphasise the
need to examine overall costs in an integrated manner.

2. LIFE CYCLE COSTS

2.1 Attitude
Traditionally designers have considered only the initial cost of that part of the project for
which they are responsible and have sought the most cost-effective solution for it. There is
increasing recognition that the sum of optimum cost components do not necessarily lead to
the most economic solution overall. However, there is still relatively little regard given to
whole life costs. This is in marked contrast to the consideration given to running costs
when purchasing a new car, for instance. Then fuel consumption, likely service costs,
repair costs and depreciation are often carefully accounted for alongside initial price, when
making cost comparisons between different models.

2.2 Cost Elements

Initial costs of execution, including the fabric, structure, foundations and services, are an
important and immediate consideration. In addition to these items, the need to finance the
construction, and the associated costs, should be quantified and included as part of the
debate on the form of the design. The way in which the cost of finance influences the
project is discussed in more detail in Section 3.2. In some cases, it might be a major factor.
Other recurrent costs, which should be considered in the overall economic discussions
surrounding a proposed project, include maintenance, future alterations and running costs
associated with environmental control of building interiors (heating, ventilation and
lighting). Another factor which should be considered is the likely benefit or financial
return. For instance, projected traffic density will clearly be an important influence on
required highway bridge capacity, whilst clearer floor areas and greater flexibility in the
use of floor space may attract higher revenue in commercial developments. These factors
are discussed in more detail in Section 2.6.

2.3 Energy Costs

Energy costs for lighting, heating and ventilation remain a significant recurrent cost item.
For buildings, initial expenditure related to energy requirements is concerned with such
aspects as the balance of provision of natural and artificial lighting, and the

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heating/ventilation requirements, which are clearly affected by the insulation specification
for the external skin.
Artificial lighting represents a surprisingly high proportion of energy consumption in
commercial and residential buildings. Adequate provision of windows and rooflights can
therefore mean significant long-term savings. These provisions need to be assessed against
higher initial expenditure, and secondary considerations, such as security. Heat gain and
glare are two potential problems which should also be considered since they may
effectively neutralise any potential savings.
Space heating and ventilation are both related to insulation levels and the volume of air to
be treated. One of the reasons why low-pitch portal frames have become more popular
than the traditional column and truss construction for industrial applications is that the
enclosed building volume is reduced and includes very little wasted space.

2.4 Maintenance
All structures (buildings, bridges and others) should be inspected and maintained on a
regular basis. There is often a trade-off between costs associated with these activities and
initial costs. Areas which are difficult or impossible to inspect need careful treatment. In
many cases there is a trade-off between capital expenditure and life
expectancy/maintenance requirements.
For steels, corrosion and its prevention is a major concern. Cost factors associated with
corrosion prevention relate to exposure conditions, planned inspection and maintenance,
design detailing, the protection specification, and the quality of the first application.
Good detailing in fact has very little cost implication and is an important part of all
designs. For instance, arrangements which allow water to collect should be avoided and
inaccessible areas sealed (Figure 1).

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The specification for the corrosion protection system should be appropriate to the
exposure conditions expected. Although some extremely good systems are now available,
there is little point in using such systems where corrosion risks are low. This point is
discussed in more detail in Section 4.3.

2.5 ADAPTABILITY
Although it is not always possible to predict future client requirements, alterations and
extensions to projects are often carried out subsequent to the initial development. Such
projects can be disproportionately expensive. Specific provision for future alterations can
only be made if details are known at the outset, but significant savings are possible if the

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original design takes account of possible changes. Although the initial development costs
may be marginally increased, long-term costs overall can be reduced.
The building life is always longer than the life expectancy of services, so the construction
should be able to accommodate likely changes in use. This capability can be provided by
adopting a "loose fit" approach, giving additional space without disproportionate increase
in cost.
Shell and core construction, in which the building consists of the structure and major
services only, with the more specific services for floors installed by the tenant, is
becoming increasingly popular for speculative commercial developments. In such cases
there is an even clearer need for a "loose fit" approach from the outset.
It is very common for the use of building to change. Change of use may require upgrading
floor loadings, modifications to floor layouts, installation of new lifts, or extending the
structure to provide more usable space. Allowing for such developments in the original
design could lead to significant subsequent savings.
Steel structures can be adapted or extended without great difficulty. The potential exists
for making connections to the existing frame, and the strength of the existing structure,
and any new attachments to it, can be determined with confidence. Nevertheless, where
future changes are envisaged, it is often more efficient to provide for these at the outset.
Where future extension is planned, simple modifications to the fabrication details and
appropriate sizing of critical members for the new conditions should be incorporated. For
instance, pre-drilling of steelwork for new connections at the interface with the possible
extension and sizing columns for increased loads facilitates later construction.
If unforeseen changes arise, it is not difficult to strengthen individual beams and columns,
for instance, by attaching flange plates to the existing section. Strengthening connections
is very much less simple, and some designers therefore overspecify the shear capacity for
connections to minimise the need for strengthening in subsequent alterations.

2.6 Benefits and Financial Return

Costs should not be considered in isolation but set against perceived benefit. The benefit
may be clearly quantifiable in terms of rental income or relate to the provision of
additional facilities. In either case usable floor area is a key factor. This might suggest
fewer, smaller columns, and should certainly encourage the designer to avoid unusable
space, for instance between columns and adjacent perimeter walls. Minimising the
thickness of partition walls and the external skin may also yield an increased floor area,
but their performance should not be compromised in doing so.

2.7 End of Life Costs

For many structures there comes a time when demolition is necessary. The cost associated
with this activity can be offset by income from the sale of recyclable materials. For steel
structures the material can be re-used either as scrap in the manufacture of liquid steel or
as secondhand products which can be re-used in new structures. The nature of steel
construction lends itself to dismantling rather than demolition.

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Some structures take this principle further and are designed as demountable. Such
structures are generally for short-term use such as exhibition facilities, temporary car
parks and highway crossings. With careful design the complete structure can be
dismantled and erected elsewhere.

3. TOTAL CONSTRUCTION
Total building cost is a complex issue due to the interaction of various elements. Usually
the best design of one aspect (e.g. structure) conflicts with others (e.g. services or
cladding). It is not, therefore, simply a case of optimising each to achieve an optimum
solution for the whole building, but rather the costings should be examined in an
integrated, holistic manner.
Buildability is also important. It is concerned not simply with the development of new
details or erection systems which might facilitate work on site, but with an understanding
of how design and construction can be dealt with in an integrated fashion to produce a
building which is simple, quick and cost-effective to execute and maintain. This approach
involves harmonisation of structural, service and planning grids.
At a more detailed level, standardisation, particularly of connection and fixing details, can
lead to significant economies, even if it implies some apparent wastage of materials. Coordination between different elements, such as cladding and structure, achieved by
simplicity of the interfaces between them, is particularly important. Non-typical areas such
as corner panels for cladding and edge details for floors need special consideration. All too
often these areas are ignored until execution is well under way and last minute solutions
can be both inelegant and costly.
Bridges and other structures are much less sensitive than buildings to interactions between
structural and non-structural components. However, for offshore structures for instance,
aspects such as appropriate construction sites and transparency of the structure to wave
loadings, installation procedures and fitting out all influence the total costing.

3.1 Typical Breakdown of Costs and Interactions

An important cost element in a steel framed building is that of the frame itself. Other
major items include foundations, flooring, cladding/external finishes and services. The
relative contributions of these items vary considerably from one project to another, but
typical cost proportions are 9% for the steel frame compared with 25-35% each for
cladding and services. Land prices can sometimes be as high as the direct costs of the
construction, in which case speed of execution becomes a predominant factor as discussed
in Section 3.2.
For multi-storey buildings, the importance of lateral bracing becomes a primary
consideration. For low-rise construction, a rigid jointed frame is often an economic
solution, but as overall height increases, this system becomes too flexible. Cross-bracing
or shear walls might then be preferred, despite possible restrictions on internal planning
imposed by the location of the bracing. With greater building heights, more sophisticated
lateral bracing systems become necessary. These systems include derivatives of both rigid
frames and cross-bracing such as outrigger trusses, braced tubes and facade frames. Some

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of these systems are shown in Figure 5 which includes indications of their appropriate
ranges of use.

A similar discussion of the use of rigid and simple frames can be held in relation to gravity
loads. The effect of rigid frame action is typically to reduce beam sizes but increase
column sections. In general, whilst the total weight of steel is less in rigid construction,
savings are often more than offset by the increased complexity of the connections.
However there may be other considerations - reduced structural depth, the undesirability
of bracing (if rigid frame action is not used to provide lateral stability) and reduced
deflections resulting from improved stiffness. For longer spans, material savings for rigid
construction are likely to be greater. Not only does the increased rigidity become more
important in controlling deflections, but the relative saving in steel weight of beams
compared with the increased weight of columns becomes more significant.
Important advantages of steel construction are speed of execution, prefabrication and
lightness. To maximise the advantages the concepts must be followed through in the
design of the building as a whole, including cladding, finishes and services. For example
the use of smaller foundations can only be achieved if the lightness of the structure is
reflected in appropriate design of other building components. This example again
emphasises the need for co-ordinating the design of services, cladding and structure and
associated with this approach, the discipline of producing the final design at an early stage.
This approach also implies that the steelwork contractor should be involved at the earliest
opportunity as part of the project team and it also places additional responsibilities on
other members of that team to avoid late changes.

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3.2 Speed of Execution

The costs of financing a project may be a major consideration. High land prices and staged
payments to the contractor mean that the client may have to sustain a high borrowing
requirement throughout the period of execution without any return in terms of either rental
income or use of the building. With high interest rates the borrowing requirement can
represent a major element in the total project cost and, under these circumstances, the
speed with which the project can be completed becomes an extremely important factor.
The importance of speed has been highlighted in a comparison of costs for typical 3, 7,
and 10-storey office buildings using three different building systems (steel frame and
precast concrete floor, steel frame and composite floor, and in-situ reinforced concrete).
Construction programmes and cost estimates prepared independently for each building
clearly showed the importance of execution time. The study also demonstrated the benefits
of steel deck composite flooring in avoiding the need for temporary propping or
scaffolding, the advantages of simplicity, and the need to ensure that various trades are
able to complete work at one level in a single operation. Providing access by programming
staircases to rise with the frame and installing floors as quickly as possible after the frame
also streamlines site work.
The trend towards greater prefabrication and sub-assembly with reduced site work has
spread from simply the steel frame to include other elements such as cladding panels and
accommodation modules. Prefabrication all helps to save execution time but it places
more pressure on the design phase. It also improves quality, reduces reliance on a skilled,
mobile workforce, and enables deficiencies to be rectified more easily than on site.
Precommissioning should also produce a greater awareness of, and provision for, future
maintenance requirements.
Late changes and traditional reliance on resolving problems on site may be suitable for
insitu construction. However, more emphasis on prefabrication in modern construction
means that the site becomes an assembly shop where the components must fit first time if
expensive delays and corrections are to be avoided.
Fast build rather than fast track is perhaps the optimum solution. In the latter the
construction programme overlaps with the design phase, implying incomplete information.
In contrast fast build construction does not start until all design is complete, and embodies
the best features of efficient building.

3.3 Weather
Any construction can be affected by adverse weather. Execution programmes and methods
themselves are generally organised with this in mind. For instance when industrial sheds
are built it is normal practice to complete the frame and envelope at the earliest
opportunity, with the concrete ground slabs subsequently being cast within a relatively
controlled and sheltered environment. Multi-storey construction utilising composite floor
decks offers similar advantages of rapid isolation from the worst effects of adverse
weather.

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Some building systems have been developed on the basis of providing a dry envelope for
the work of execution.

3.4 Services, Cladding and Structure

The greatest cost interactions between building components are probably those between
structure, main services and cladding. The total floor depth includes the structure (slab and
beam) and services. The greater this depth the greater will be the total height of the
building, increasing the area of cladding. Even for simple enclosure systems, increased
costs will result. For sophisticated curtain walling systems these increases could be very
high. In extreme cases, where planning constraints are particularly severe with regard to
total building height, it is possible that the selection of a shallow floor zone could result in
the inclusion of an additional storey compared with the case for a deeper floor
construction depth.
Smaller scale services (electrics, telecommunication wiring) can be accommodated within
raised floors, or in trunking set in the screed or within the structural concrete slab. They
have little implication for the structure. Large ducted air conditioning systems involve
greatest interaction. Here the objective is to produce an efficient floor structure, which can
accommodate the required size of ducts (including cross-overs), and which also allows the
addition or increase of sizes as servicing needs change.
Possible strategic solutions are separation or integration. Separation gives greatest
flexibility and provision for future changes. Allowing the services to pass through the
structure may result in some savings in overall construction depth but installation may be
difficult and cause possible damage to paint and fire protection; future changes may also
be limited.
Structural forms to facilitate accommodation of services relate particularly to different
arrangements of beams. There is generally much more space available between beams
where only slab depth contributes to construction depth. Possible solutions (Figure 2)
include standard I beams, castellated beams (which, although deeper, provide limited
opportunity for accommodating service ducts), trusses and stub girders (both deeper again
but with greater provision for ductwork). The parallel beam arrangement, which separates
on two levels both structure and service runs in two directions, has proved to be a
successful solution for a number of projects (Figure 3). Other possibilities include various
forms of tapered and haunched beams, used to optimise overall depth and structural
efficiency, but at the expense of greater fabrication costs (Figure 4).

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3.5 Foundations
Foundation costs are an important factor in the overall economics of building construction.
For small scale buildings on sites with good foundation conditions, simple foundation
solutions are likely to be suitable. Where foundation loads are high and/or foundation
conditions are poor, more sophisticated and expensive solutions such as piling may be
necessary, Figure 6. In such circumstances the weight of the superstructure may be critical
and suggest a lighter, possibly less efficient form. For instance closely spaced beams to
reduce the thickness of floor slabs, which might themselves be constructed using
lightweight concrete can reduce foundation loads considerably. Steel as a structural
material is also lighter than other structural materials for a given load resistance.

4. STEELWORK COSTS
At a more detailed level the economics of steelwork construction can be affected by
decisions regarding the precise form of element, type of steel used and the method of
connection. Some of these decisions are influenced by the purchase route for the steel

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itself. For large projects, steel can be purchased directly from the mill in the exact lengths
required and in the desired grade. The price of individual structural products varies not
only with type (hollow sections are generally more expensive than open sections such as Ibeams and H-columns) but also within a product range, with little apparent rationale
behind the pricing policy. Thus selecting a section of minimum weight does not guarantee
an optimum solution in terms of cost, even for an individual element. Specifiers should
therefore be aware of pricing policies.
Small orders cannot be processed in this way and the steel is then purchased from
stockholders. In this case the steel is only available in a limited range of grades, (probably
only mild steel) and a premium is payable to the stockholder. In addition certain sizes of
standard section may not be stocked and the sections will only be available in a limited
range of lengths.
These considerations clearly have important implications for the specifier.
Where higher grades of steel are available they may offer the opportunity for improved
efficiency. For instance, high yield steel has a yield strength approximately 25% higher
than normal mild steel yet costs only about 10% more. However, where strength is not a
critical design condition, for instance in the case of very long span beams where deflection
control may be dominant, the use of high grade steel may simply be wasteful.
A breakdown of costs for structural steelwork in a multi-storey building might typically be
as follows:
steel

47%

corrosion protection

5%

fabrication

22%

erection

8%

fire protection

18%

Clearly optimising the cost of the steelwork (within an optimum solution for structure and
construction as a whole) is dependent on minimising the total cost of these contributory
elements, rather than optimising each independently. A balance is needed between
structural efficiency, simplicity of construction and building use.
It is clear that there is more potential for reducing costs in fabrication and erection than in
the steel itself. In this respect, work on site is of most importance - easier assembly is
likely to lead to overall economy. Transport is also important, not as a cost item in itself
but as an aid to more efficient erection.

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4.1 Erection
Because erection is carried out in the open, often under difficult conditions, and it is the
essential interface with other construction trades, it is in many ways the most important
part of the design and execution process for a steel structure. Problems at this stage can be
costly to rectify and involve long delays to the programme. Apparently trivial issues, such
as steelwork delivered out of sequence, lack of bolts or fittings, long lead times for minor
additional items, extensive double handling of materials and misfit of members, can cause
significant reductions in construction efficiency.
Much depends on good planning. Preparation of an erection scheme should be made on
receipt of first construction issue drawings prior to detailed drawing office work by the
fabricator. At this stage items for delivery as sub-assemblies can be identified and the need
for temporary bracing assessed. Attachments for bracing should be incorporated within
initial fabrication drawings to avoid double handling of both drawings and materials.
The need for safe access for erectors must be recognised. Time can be saved and material
re-used if temporary stagings are pre-engineered and delivered with steelwork rather than
relying on makeshift methods on site.
Loose temporary landing cleats under major beams and girders, shop-bolted to columns
greatly facilitate erection. Erection drawings should be clear, unambiguous and complete,
including on a single drawing all details such as bolt sizes, weights of members, presence
of fittings, etc.

4.2 Fabrication
The size of individual components is limited by the lifting capacity of available cranes and
transportation. This applies also to other parts of the construction such as finishes and
cladding. Within these constraints however the general principle is to maximise work at
the fabrication stage and minimise work on site, pre-assembling units in sections which
are as large as possible.
Connection design and detailing which standardises details, bolt diameters and lengths
(HSFG and 8.8 bolts of same diameter should never be used on the same job) simplifies
erection and minimises risk of error. Although material and fabrication costs may be
increased marginally, savings on site far outweigh such increases. Simplicity and
repetition of frame components is related to design; for instance special fabricated sections
such as tapered beams become more economic in larger numbers.
Preferred details should be incorporated to facilitate site erection. For instance fin plates
are preferable to end plates or cleats since they enable beams to be swung directly into
position (Figure 7). Moment connections should be avoided if possible, but where
necessary the erector should be consulted with regard to the preferred type of detail.

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A loading schedule should be prepared by the erector showing when steel is to be

delivered, how it is to be bundled, where to be placed on the trailer for optimum offloading and where to be set down in its correct location on the building frame. Lack of
vigorous production control often requires a buffer store on site to maintain the erection
programme. This procedure is inefficient in terms of storage space, cranage and multihandling. Programmed site erection should be the control and 'pull' on fabrication, with
delivery scheduled to accord with the daily erection programme. One of the most notable
examples of erection programming was the construction of the Empire State Building in
New York.
There is a clear need for a production engineering philosophy in the design office, factory
and on site. For example, a careful study of the fabrication process can significantly
reduce material handling. The productivity of the most efficient shops is based on a labour
content of 2 man hours per tonne for simple multi-storey construction compared with
more than 20 man hours per tonne average for all steelwork.
Some structurally efficient solutions, even based on standard rolled sections, may be less
efficient in terms of fabrication. Column sections with bigger overall dimensions generally
have larger radii of gyration and hence, for a given application, have lower slenderness
ratios and higher buckling strength; they may therefore be lighter in weight than a
comparable section of more compact shape. Where these sections are used as part of a
moment resisting frame, however, the reduced flange thickness of the bigger section may
well mean that local stiffening is required, increasing fabrication costs.
Computer controlled cold sawing, punching and drilling machines mean that bolting for
low to medium rise construction is often cheaper than welding which involves more
labour, cost and time. This is particularly so on site where special access, weather
protection, inspection and temporary erection supports are required.
Linking of CAD/CAM and management information systems avoids transcription of
information, saving time and eliminating possible errors.

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4.3 Corrosion and Fire Protection

The cost of initial corrosion protection is unlikely to be greatly influenced by the
steelwork details, although maintenance costs and performance can be significantly
affected. Appropriate specification of the corrosion protection system is important. Steel
within a heated building is unlikely to need any long term protection at all, whereas
exposed steel or steel within the external envelope may need a high level of protection.
Detailed advice is available. Painting costs are partly dependent on the area to be painted,
whilst galvanising costs are related to the weight of steelwork. The latter therefore
becomes a more attractive alternative for lightweight structures with a large surface area
such as trusses and lattice girders.
Regulations relating to fire protection requirements now allow calculation methods to
prove reduced or indeed the elimination of such protection. A range of relatively cheap,
lightweight proprietary systems is also available and, if these systems are adopted,
performance, appearance, and wet or dry application influence the final selection. Some
structural solutions such as slimfloor beams offer the potential for adequate fire resistance
without protection. Although the weight of steel is greater than for conventional systems,
the overall effect may be some savings. In addition, slimfloors offer a reduction in
structural depth and are, therefore, attractive in terms of accommodation for services.

5. CONCLUDING SUMMARY

Costing of construction projects is a complex issue and should include all aspects
in an integrated fashion.
Evaluation of whole life costs should be encouraged rather than focusing only on
initial construction costs.
Buildability and good planning are important aspects in minimising costs.
Efficient integration of structural and non-structural items is dependent on detailed
information being available at an early stage, but is essential if efficient
construction is to be achieved.

6. ADDITIONAL READING
1. British Steel Corrosion Protection Guides.
2. Brett, P. Design of Continuous Composite Beams in Buildings; Parallel Beam
Approach. The Steel Construction Institute, 1989.
3. Owens, G.W. An Evaluation of Different Solutions for Steel Frames, ECCS
International Symposium, "Building in Steel - The Way Ahead", No: 57
September 1989, pp 6/1 - 6/28.
4. Glover, M.J. Buildability and Services Integration, Ibid.
5. Horridge, J.F. and Morris, L.J. Comparative Costs of Single-Storey Steel Framed
Buildings, The Structural Engineer, Vol. 64A, No. 7, July1986, pp. 177-181.
6. Iyengar, H. High Rise Buildings, ECCS International Symposium, "Building in
Steel - The Way Ahead", No: 57 September 1989, pp 1/1 - 1/30.
7. Copeland, B., Glover, M.J., Hart, A., Haryott, R. and Marshall, S. Designing for
Steel, Architects Journal, 24 & 31 August 1983.
8. Hayward, A.C.G. Composite Steel Highway Bridges, Constrado.

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9. Customer Led - Construction Led, Steel Construction, Vol 7, No. 1, (BCSA),
February 1991.
10. Horridge, J. F. and Morris, L. J., "Comparative Costs of Single Storey Steel
Framed Structures", The Structural Engineer, Vol 64A, No. 7, July 1986.