INTRODUCTION TO BUILDING ECONOMICS
Philosphy Of Building Economics
Value of money
Size and Contribution to GDP
Providing Building
for Investment
Providing Job
Opportunities
Government as the
Main Client
Construction industry supports various industries
(manufacturing, mining, transportation, services)
Personal use
high rate of
workforce
Construction industry is seen as one of the economic growth engine to the country and reflects the national economic situation
Primary
Secondary
Tertiary
Investment (rent)
Intensive employment of workers
distribute the
country’s wealth
an important role in the demand
Building Economics Terminolgy
Cost management
Cost Planing, Cost data, Cost analysis, Cost estimtes, Cost modelling, cost control, cost, price, profit, value, feasibility, viabiltiy, profitability.
Depreciation
Bond, Capital, Exports, Import, inflation, interest
Gross Domestic Product
Inflation, Investment, prductivity, Profit, Shares, surplus, tariff, Saving, Mortgage, goods, finance, deflation
The Concept of Building Economics' Terminology
Cost
The amount of money needed to buy, do, or make something
Price
The actual amount of money that a client or a consumer has to spent in order to acquire a certain product or service.
Profit
When business earns more money than the expenses (including costs and taxes) needed to produce and sell goods or services.
Value
The monetary worth of something compared to the price paid or asked for it.
Feasibility
The possibility that can be made, done, or achieved, or is reasonable.
Viability
The ability to live, operate or be sustained
Profitbility
The ability of a business to earn a profit.
Cost Management
Development Framework Of Cost Management
Inception
Feasibility
Outline Proposal
Scheme Design
Detailed Design
Prepare Bills of Quantities
Tender Action
On-site Operation
Completion
Feedback
Application Of Cost Management At Various Stages
Preliminary Estimate
Cost Plan
Cost Check
Tender Reconciliation
Post- Contract Cost Control
The Importance Of Cost Management
Ensuring client receives value for money
Ensuring parties are aware of the implication of
cost
Integrating cost with time and quality
The ability to predict a project's future expenses
and costs
The ability to predict a project's maintenance
expenses and costs