Navigating market volatility: determinants of cost-estimation accuracy in Egypt’s construction sector

Accurate cost estimation is fundamental to the financial viability of construction projects, yet remains difficult in volatile developing economies. This study investigates the determinants of cost-estimation accuracy in the Egyptian construction industry and develops a validated causal model linking the contextual factors that shape estimation, the techniques used, and the resulting outcomes. Grounded in organisational information-processing theory, a framework comprising three latent constructs and four hypotheses was derived from a systematic literature review and tested using data from 112 industry professionals, employing the Relative Importance Index (RII) and Partial Least Squares Structural Equation Modelling (PLS-SEM). Factors strongly affect technique selection (β = 0.490), techniques influence outcomes (β = 0.437), and factors directly influence outcomes (β = 0.463); techniques partially mediate the factor–outcome relationship (β = 0.214; variance accounted for = 31.6%), explaining 60% of the variance in outcomes. The study contributes a validated diagnostic framework and guidance on adopting digital tools, advanced analytics, structured cost databases, and risk-based estimating to curb overruns.