Foreign demand for US goods will spur growth, as more production facilities are needed
Los Angeles, CA (PRWEB) November 14, 2012
The Industrial Building Construction industry is responsible for constructing factories, assembly plants and mineral processing mills. The health of the US manufacturing sector determines its growth, since most industry projects are related to buildings used to produce and distribute goods. Interest rates, property values and lending standards also influence growth because loans and bonds finance most developments and renovations. Industry revenue is estimated to grow at an annualized rate of 17.2% to $31.5 billion in the five years to 2012, according to IBISWorld industry analyst Deonta Smith. However, overdevelopment, coupled with the spread of the global economic downturn, caused industry revenue to drop in 2007 and 2008; during this time credit conditions tightened, import penetration increased and manufacturing capacity utilization shrank. From 2009 to 2010, a surge in federal government investment into automobile and other transportation equipment manufacturing facilities caused industry revenue to bounce back. Similarly, in 2010 and 2011, industries such as semiconductor manufacturing expanded production, increasing demand and driving growth in the industry.
Growth is expected to continue over the next five years as firms benefit from an improved economy and the reinvestment of corporate profit into new manufacturing and distribution structures and renovations. Foreign demand for US goods coupled with the rising trend in onshoring is also expected to drive up industry growth. Foreign companies are increasingly locating their manufacturing operations in the United States as a result of the weak dollar and rapid economic expansion in developing countries. As a result, demand for new or remodeled industrial space is set to rise as manufacturers and industrial firms look to expand production. Revenue for the Industrial Building Construction industry is expected to jump 8.2% in 2012, Smith says.
While lending standards will loosen over the next five years, interest rates are also set to rise starting in 2013, thereby increasing the cost of new industrial development. Additionally, outsourcing basic manufacturing to countries with lower wages will become an increasing threat and hinder investment in domestic manufacturing structures. As a result, industry revenue is expected to grow moderately from 2013 onward, with a brief dip in 2015 due to increasing market saturation of efficient and sustainable facilities. During the five years to 2017, revenue is forecast to grow. The industry is highly fragmented because the majority of firms are small operators that specialize in specific regions or sectors. For more information, visit IBISWorld’s Industrial Building Construction in the US industry report page.
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IBISWorld industry Report Key Topics
The industry is composed of contractors that are primarily responsible for the construction (e.g. new work, additions, alterations, maintenance and repairs) of industrial and manufacturing buildings. Establishments include general contractors, design-build firms and construction management operators.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.