Well, if you go for the position that people are just machines made of atoms, then, yes, physical reality is all there is, even in economics. But no, I do not want to start with atomic physics, and from there try to derive human utility, and from that try to derive economics. That's... not a feasible research program. It's not going to provide any insight into economics, ever.

So even if you accept the materialist position, for purposes of doing economics, you kind of have to regard humans as something different. (Or so it seems to me, a non-economist.)

Economics (like most things that aren't physicsf even lots of subfields of physics) doesn't model everything (or much of anything) it addresses in the physical universe from the base up, but it doesn't require treating anything as special and non-physical either.