Blocks are objects that a player creates by selecting a location and then adding the appropriate Components with a Welder. Blocks connect to other blocks to create a structure, either a Small Ship, Large Ship. or Station. There are currently 121 Blocks with pages in the Space Engineers wiki.
The dimensions of a single 1x1x1 block are 0.5 meters to an edge for a Small Ship Blocks, and 2.5 meters to an edge on a Large Ship or Station Blocks, thus Small Ships Blocks are about 1/125th (0.8%) the volume of Large Ship and Station blocks. However, this does not mean the mass and costs are reduced to 0.8%.
In Survival Mode, blocks are created over time with a Welder. They will require that an Engineer have the needed Components with them. The process will start by placing a block in the desired location, then approaching it with a welder. A percentage based progress bar will appear on the right with a list of the next needed components and their quantity. The block will be complete and functional once all the required materials are placed and the progress bar meets the red indicator bar. If the block is functional then a blue indicator bar will show when the player now has Ownership. A block may then be completed to 100% to increase durability; mostly this means mounting additional Steel Plates. As the block is built, it will go through 3-5 stages of visual change, starting with a basic framework and then going through various stages of completion.