Industry Report – Industrial Construction

Jennifer Nietz - Manager of Operations


April 2013 – What is industrial construction? Industrial construction includes the building of assembly plants or factories that have a primary purpose of manufacturing goods. This article will take a look at trends in industrial construction domestically and what we are expecting over the next five years.

If you currently provide a good or service to the construction industry, you probably have felt the freeze in budgets and spending that started in late 2010 and 2011. As we were prospecting this industry during those years it was common to hear that budgets were frozen, and that there were going to be no expansions, improvements, or rebuilds that were going to be taking place for the foreseeable future. As we began our work in 2013, thankfully, we have started to hear a different story. Planning!

According to IBISWorld, growth in the industrial construction industry over the next five years is expected to increase 2.3% annually, raising revenues to $37.8 billion. This number indicates moderate growth however, and there are several factors of why this number is not expected to be higher. According to a recent article in the Washington Post, the Congressional Budget Office is only expecting to be able to continue ultra-low interest rates for another two years. An increase in interest rates will raise the cost of new industrial development. What we will start to see is new industrial development occurring internationally where countries have lower wages allowing for sustained growth. However, in 2013 IBISWorld predicts that we are going to see revenues jump 6.7%!

Now, we are starting to see domestic industrial construction pick up and advance some of the work that went by the wayside. This work includes renovations, small expansions, and production enhancements. In 2013, organizations are going to continue to take advantage of low interest rates, decreasing unemployment rates, and increased industrial construction demand.

Major Market Segmentation (2013)

Industrial Market Segmentation 2013