Introduction to Building Economics as related to Architecture

Introduction to Building Economics

Building economics is concerned with production and consumption and services and the analysis of commercial activities –

As it is related to architecture and building activity – all types of buildings for all types of functions by the builders (production) and consumption i.e., the ones who either buy or hire those buildings for various functions with the services offered by professionals like architects, planners, engineers etc.

Ends – scarce means

The scarce means like land, building materials, and allied services result in failing to meet the deman in housing sector.

Basic concept – any activity (legally permitted) which shall result in building activities to serve people for which the people are ready to pay the price directly or indirectly by buying or hiring the spaces can be treated as an economic activity.

Goods and services

Economic good is a physical object like natural or manmade (artificial) goods.

Natural goods

Sources like land, water, air, natural stones, sand basic raw materials to be converted to manmade materials to be used for construction of buildings.

Manmade goods

Product like mosaic tiles, tiles of all stones, ceramic tiles, wall finishes, doors/windows/woodwork, electrical materials, water supply and sanitary pipes and fittings etc, harnessing solar power, A/C plants, heating, cooling etc.


Producers are individuals, builders, contractors in private sector or governments state or central.

Primary producers are those who produce raw materials like wood, stones, basic raw materials for production of building materials.

Secondary producers are those who are engaged in production of materials like cement, procure sand, metal, steel, aluminium, various other materials to be used in building construction.

Tertiary producers

Tertiary producers are those who carry out the following functions:

  • Transportation
  • Banking
  • Architects and Engineers etc who offer services, insurance agencies for buildings, educational institutions, who train professionals.


In good old days, there was barter system with no profit motive. Present days, the medium of exchange is money which is used in so many forms for buying and selling for all activities.

We will be discussing “Micro Economics” and Macro Economics” in detail in our successive articles…

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