Industrial Building Construction
Jennifer Nietz - Director of Operations
One of the largest industries in the United States is the construction industry. This industry is composed of contractors that are primarily responsible for the construction of industrial and manufacturing buildings. Establishments include general contractors, design-build companies, and construction management operators. For those of you reading this who are familiar with COACT you will also know that this is a “sweet spot” for COACT. The depth of our knowledge and experience in this area is unmatched in this market. This month I wanted to focus on this industry for my report.
What we are seeing in this market is improved revenues due to an improved economy and a slight increase in corporate investment. We have seen pretty steady annual growth over the last five years at 1.6% according to IBISWorld and this is anticipated to expand to 2.6% annualized over the next five years.
While there has been a significant decrease in federal investment in key markets like auto, semiconductor, alternative energy, and transportation. However, what we are seeing is companies are reshoring operations back to the United States due to wage hikes in developing countries. IBISWorld is also seeing an increase in private investment and at a very high rate of 5.7% annually. The main industries that will see the largest demand for industrial building construction are transportation equipment, chemical manufacturing, and computer and electronic equipment. We are also going to see a strong push from the green technology sector; products include solar panels, wind turbines, and hybrid vehicles. The below chart will show you the market segmentation:
I have some cause for hesitation though; the information presented in IBISWorld may be little steep so reader beware. If you look at the latest reports for US Manufacturing Production and US Industrial Production you will see both are reporting downward trends.
I would believe some of the conflicting information is caused by the volatility in the industry that still exists, we may experience quite a bit over the next year or two before we see it steady out.
Questions or comments? Please contact Jennifer Nietz at jnietz@teamCOACT.com.