Commercial Construction Uptake

Commercial Construction Uptake

by Marie King

Commercial construction

Corporate Profit/Revenue

According to, “Tight credit markets, stubbornly high unemployment and limited consumer spending contributed to the slow growth of the commercial construction industry. However, the downward slide in revenue has been reversed since 2012, thanks to a spike in nonresidential construction, demand for office space, corporate profit, as well as sustained growth in consumer spending.” As a result, the commercial construction industry revenue as expected has increased in the past five years from 2012 to 2016. Over the five years to 2021, demand from downstream markets is anticipated to remain strong, along with increasing corporate profit.”

Non-Residential Construction

The state of commercial construction has been improving since 2012. The American Institute of Architects (AIA) predicted in 2015, commercial construction would experience a growth of 9%. In 2015, the commercial construction industry grew by 20%. The big increase was due to pent-up need for commercial space. 2016 is forecasted to grow by 8.2%. Likewise, in 2017, commercial construction is projected to increase by 6.7%. AIA has also predicted that the red-hot commercial construction sector will spend almost $390 billion dollars this year on commercial construction.


According to, “The greatest amount of activity was seen in the building of commercial properties—most notably offices and hotels—with an unusually high spike in manufacturing construction spending triggered by the surge in domestic oil and natural gas production.”

Office space has been in demand since 2012. Office space and hotels has fueled the growth of the commercial construction industry. Once jobs were being increased at a rate of 250,000 jobs per reporting time, the need for more office space surfaced. The creation of jobs spiked the growth of the commercial construction industry. Demand for hotel building came out of the need to deal with corporate customers from other areas. Lately, there has been a rising demand for health-care and education facilities. Health-care facilities meet the needs of an aging population. With Millennials being the largest sector of the USA population, educational facilities meet their needs to be more knowledgeable and skilled.

Consumer Spending

Kermit Baker, PhD, of AIA states, “To the extent that the economy is performing, it is largely in interest rate-sensitive areas. At the top of the list is consumer spending. Despite soft wage growth, consumers continue to lead the way, spending more on restaurants, automobiles, electronics and lodging. Low interest rates represent an inducement, particularly with respect to the purchase of new cars, which are back to pre-recession levels or better.”