Built up: Rising corporate profit and decreased office vacancy rates will boost demand

The downward slide in revenue for the Commercial Building Construction industry has reversed since 2012, thanks to a spike in nonresidential construction and corporate profit, as well as sustained growth in consumer spending over the past five years. Over the five years to 2022, demand from downstream markets is anticipated to remain strong, along with increasing corporate profit. In addition, growth in consumer spending will raise demand for restaurants and other businesses in the consumer discretionary sector. Furthermore, as the number of new businesses increases and demand for commercial space grows, office vacancy rates are projected to remain low. Encouraged by robust demand, industry revenue is projected to grow over the next five years...purchase to read more.

Industry Statistics & Market Size
Revenue
$204bn
Annual Growth 12-17
10.5%
Forecast Growth 17-22
Profit
Employment
262,980
Businesses
67,264
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • The industry’s downward slide reversed, thanks to a spike in nonresidential construction and corporate profit
  • Strong corporate profit and increased consumer spending encouraged new businesses to open
  • Increasing corporate profit will raise demand for new commercial construction
  • Industry Report - Starting a New Business Chapter

    Barriers to entering and succeeding in the Commercial Building Construction industry are moderate. New entrants must contend with several hurdles, including the established names and reputations of existing local general contractors (GCs), the need to hire skilled labor, building relationships with larger contractors and materials suppliers, the lending environment and whatever licensing and regulatory requirements exist in the state. Conversely, concentration in the industry is very low, as few companies are able to operate outside a narrow geographic market, and limited capital investment is needed to enter the industry as a GC...purchase to read more.

    Additional Insights for the Commercial Building Construction Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Commercial Building Construction Industry are

  • Access to highly skilled workforce
  • Ability to negotiate successfully with regulator
  • Ability to compete on tender
  • IBISWorld analysts also discuss how external factors such as Office rental vacancy and Value of private nonresidential construction in the Commercial Building Construction industry impact industry performance..

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    What's in this report

    What is the Commercial Building Construction Industry?

    This industry includes those companies primarily responsible for work on the construction (i.e. new construction, additions, alterations, maintenance and repairs) of office, retail, hotel, agricultural and entertainment buildings. Participants are general contractors or project managers. This industry excludes institutional buildings (e.g. hospitals and schools), heavy industrial buildings (e.g. factories and power plants) or infrastructure (e.g. communications towers or oil pipelines).

    Industry Products
  • Design, bid, build contracts
  • Design-build contracts
  • Integrated product delivery contracts
  • Construction manager at-risk contracts
  • Construction management agency
  • Industry Activities
  • Office building construction
  • Hotel and motel construction
  • Restaurant, cafe and bar construction
  • Retail store construction
  • Shopping center or shopping mall construction
  • Commercial warehouse construction
  • Service and gas station construction
  • Auto service and sales store construction
  • Entertainment and recreation building construction (e.g. casinos, gyms, cinemas and arenas)
  • Radio and television broadcast studio construction
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Office rental vacancy
  • Value of private nonresidential construction
  • Consumer spending
  • Corporate profit
  • Yield on 10-year Treasury note

  • Current Performance
  • Shoots of growth
  • Late bloomer
  • Industry structure and profitability
  • Chart: Revenue Growth

  • Industry Outlook
  • Increased consumer and business spending
  • Industry profit and employment
  • Contracts and convergence
  • Table: Commercial Building Construction Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Commercial Building Construction Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Wholesale Trade
  • Gas Stations with Convenience Stores
  • Department Stores
  • Real Estate Investment Trusts
  • Amusement Parks
  • Casino Hotels

  • Key Selling Industries
  • Cement Manufacturing
  • Concrete Pipe & Block Manufacturing
  • Construction
  • Construction & Mining Equipment Wholesaling
  • Glass Product Manufacturing
  • Heavy Equipment Rental
  • Iron & Steel Manufacturing
  • Property, Casualty and Direct Insurance
  • Wholesale Trade

  • Products & Services
  • Construction manager at-risk contracts
  • Design, bid, build contracts
  • Construction management agency
  • Design-build contracts
  • Integrated product delivery contracts
  • Chart: Commercial Building Construction Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Office buildings
  • Retail buildings (e.g. stores, malls and restaurants)
  • Lodging (e.g. hotels, motels and resorts)
  • Warehouses and storage
  • Amusement and recreational buildings
  • Other buildings (e.g. parking garages)
  • Farm buildings
  • Chart: Major Market Segmentation for the Commercial Building Construction Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitWagesPurchasesOther costs
  • Chart: Cost Structure Benchmarking – Sector vs Commercial Building Construction

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Commercial Building Construction Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Commercial Building Construction Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Commercial Building Construction Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Office Rental Vacancy Rate (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Computer-Aided Design (Cad)
  • The use of computer technology to aid the design and drafting of a part or product using software tools that can create two-dimensional drawings or three-dimensional models.
  • Developer
  • An enterprise that prepares a real estate site for residential or commercial use. A developer raises capital, gains zoning approvals and hires contractors to design, construct and develop property.
  • General Contractor (Gc)
  • Also called a prime contractor. An individual or company that manages the construction of a structure for a property owner or developer. A GC may retain a labor force or use subcontractors.
  • Write Down
  • To deliberately reduce the value of an asset to reflect its current market value.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s industry research report on Commercial Building Construction provides up-to-date sales and market data, allowing you to identify the product and customer segments driving revenue growth. The report identifies the leading companies in the industry, and offers strategic analysis of the key factors influencing the market. Our data forecasts are accompanied by full analysis to illustrate how the market is responding to dominant and emerging trends.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Commercial Building Construction:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Commercial Building Construction market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Commercial Building Construction, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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