Trying to put one face on the commercial construction industry is almost impossible. The words “commercial construction” are the ordinary words that describe new building, new school, and new office parks and other commercial projects. Annual revenue for the 729,345 companies that do commercial construction work is $1.7 trillion. The industry employs more than 7.3 million people, and the average worker’s salary is a little over $45,000 a year.
To say the commercial construction industry is competitive would be an understatement. There’s a lot of money in commercial construction when the work meets industry standards. But not many companies are able to compete for the big jobs because of capital or past performance issues. The good companies are busy all the time, and the mediocre companies search for the building crumbs that the big companies don’t like.
Companies like the Sierra Group in Northern California stay busy, even though the cradle of the high-tech industry is experiencing movement to other cities. The reason for the slowdown is the cost of construction in the San Francisco/Silicon Valley area. Bank construction loans are not easy to get because of wage increases, glass prices, and steep competition. Tech companies are looking at Chicago, Austin, and other cities, and that gives other construction companies a chance to get into the lucrative tech-building sector.
The Southeast seems to be the area where construction companies are growing. Cities like Charleston, Charlotte, Atlanta, and Nashville are boom towns, thanks to a surge in corporate headquarter interest. More than 19.6 million square feet is under development in Atlanta now, and the big cities in the Southeast are enjoying similar building statistics.
Houston is having commercial construction growing pains. Office construction in Houston is off by more than 40 percent. Other Texas cities are doing better, but growth is still slower than other cities around the country.
The education sector of commercial construction is enjoying double-digit increases. In 2016, school and universities around the country put new facilities on their project list. And this trend will continue for the next three or four years. Industrial construction is still very strong, and the education sector is on track to beat all 2017 projections. The renovation sector of the industry is growing quickly. The high demand for available space continues to be the catalyst for more renovation projects.
The key to growth in the commercial construction industry is keeping costs in line. That’s easier said than done in an industry that uses expensive materials and services. But the growth forecast is good for the industry, especially if Trump is successful in privatizing some government services, and he is successful in building the famous wall. If Congress allocates money for infrastructure and if the country can increase GDP growth, commercial construction companies that do road work will grow, and other sectors of the industries will grow as well. Nothing is certain, but unless there is a major glitch like a war or natural disaster that cripples the country, the construction industry will continue to thrive and grow.