5 Reasons The Future Looks Bright For Commercial Construction

There are plenty of reasons to feel optimistic about the American economy. After years of stagnant growth in the wake of the Great Recession, unemployment is falling, housing prices are rising, and the dollar has rebounded nicely against other global currencies. Perhaps the most auspicious sign for continued economic recovery and growth is the incredible expansion of commercial construction.

In 2014, commercial building rose by a whopping 14 percent. According to the 2015 Dodge Construction Outlook, that upward trend will continue with an estimated increase of 15 percent by year’s end. Why is this happening? Let’s find out!

1. Hiring Boom

As U.S. employers continue to hire hundreds of thousands of new workers each month, they must expand their operations. It is no surprise, then, that much of the growth in the commercial building sector has been spurred by new office space in the private sector. Both large and small companies are now spending across the board, increasing their investments in new facilities.

2. Demographics

Like most developed nations, the United States has an aging population. Since older folks consume more health care than younger ones, the need for new hospitals, health clinics, and other medical facilities has never been greater. According to reliable estimates, institutional building, which includes hospitals, is expected to rise by 9 percent in 2015.

3. Energy Growth

Now the world leader in oil and gas production, the infrastructure that is needed to sustain these massive, growing industries must be updated and upgraded in the coming years. A recent estimate put the total amount of infrastructure investment needed at just over half a trillion dollars. Yes, that’s trillion with a “T!” Many of these improvements will require commercial building, both onshore and offshore.

4. GDP Rising

They say a rising tide lifts all boats. With the economy expected to grow at around 3.5 percent, many industries should reap the benefits. At present, construction accounts for around 5.5 percent of gross domestic product (GDP) — the broadest measure of economic activity. As a result, the sector should get a nice bump simply because the economy as a whole is growing.

5. Made In America

Fueled by strong growth in the automotive sector, manufacturing plant construction should continue to grow at an impressive rate. Although not quite as rapid at the 42 and 57 percent increases the industry experienced in 2013 and 2014 respectively, recent estimates remain high by historical standards. According to the aforementioned report, manufacturing plant building is expected to rise by 16 percent in 2015. Those numbers should remain in positive territory for the foreseeable future, thanks in no small part to the precipitous decline in manufacturing costs of late. Although China still makes items for a lot cheaper, producing products in the USA is getting ever more affordable.

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Trends in the Commercial Construction Industry

Mayor R. T. Rybak’s 2011 budget address on August 17, 2010 must have brought cheer to the Minnesota commercial construction industry. The mayor, speaking from Minneapolis City Hall, put a lot of stress on “growth.” He also rejected the popular belief that Minneapolis, locked in by other municipalities on all sides, is fully developed.He listed many areas capable of absorbing extensive growth.

Earlier in the year, John K. McIlwain, Senior Resident Fellow, Urban Land Institute, in a presentation to the trustees said, “The old ‘normal’ will not return. Over time, a new mode of metropolitan development will emerge, presenting opportunities and stiff challenges. Those who fail to understand these new trends will find themselves building what is no longer in demand.”

While one is showing the way forward and pointing towards potential growth for the Minnesota commercial construction industry, the other cautions with words to be well-marked by Minnesota building contractors. The future will clearly be won by those that have taken advantage of the recession to reinvent themselves to a “new normal.”

Consumer Behavior and Demographics

Trends indicate that the major drivers for new real estate development will be consumer behavior and demographics. At a time of scarce resources and increased competition, extensive planning with emphasis on aggressive workforce training are the areas that the Minnesota building contractors should focus on.

Transit-oriented development

With the proposal to appoint a new director of transit-oriented development, Mayor Rybak re-emphasized the emerging trend of developing real estate along current and future transit lines. Though past experience has shown that employers, and therefore commercial buildings, do not necessarily follow this trend, there is a need to market transit-oriented job locations to private companies. The Minnesota commercial construction industry could use innovative ideas to develop the large expanses of undeveloped commercial property lying adjacent to light rail stations.


Nanotechnology materials and applications can be used by the construction industry to enhance material properties and functions. Considering that 41 percent of all energy used in the United States is consumed by commercial structures and residential homes, nanotechnology can help enormously in energy conservation.

Some Benefits from Manufactured Nanomaterials (MNMs) And Nanocomposites:

Structural strength enhancement
Self-cleaning surfaces
Corrosion resistance
Abrasion resistance
Biocidal activity in coatings and paints
Improved thermal management
Antimicrobial properties
Harvesting solar and other forms of renewable energy
MNMs can substitute for harmful environment pollutants such as lead and mercury
However, research is still underway on the potential pollutant risks from MNMs. The industry is still gaining insight into the life cycles of these new materials and weighing the risk factors workers are exposed to. The Occupational Safety & Health Administration hosted a Web Forum (August 16, 2010) to identify hazardous chemicals most in need of agency action. Still, one thing is clear — progressive companies who stay current with new, safe technologies will come out ahead.

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