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