Commercial Construction Industry is a booming market all over the world. At the time when the residential real estate market is going through a very bad phase,
Commercial Construction Industry is constantly performing extraordinarily well.
In United States of America, this industry has observed a massive growth of around 12 % during the 2006 fiscal. Commercial construction industry in USA has grown at an enormous rate between the years 2005 and 2006. During this period, this industry has grown by five times which is itself is a phenomenal performance.
Experts have observed a peculiar phenomenon regarding the relation between residential and commercial real estate with that of the growth rate of the overall economy. They have found out that when an economy enters into a booming phase then the sector, which also observed a consequent boom, is the residential real estate market. But as this boom period enters its last phase in the business cycle then the acceleration in the housing market falls and the growth is seen in the Commercial Construction Industry. Thus, the analysts, economists and the experts of the Chicago Mercantile Exchange (CME) have come to a conclusion that during the first phase of the boom period the housing sector flourishes but with the passage of time this enthusiasm fizzes out and during the finishing lap of the boom period, the Commercial construction industry performs extraordinarily. The reason behind the last phase performance of this industry lies in the fact that commercial construction industry has a higher latent period than the housing market, that is, the commercial real estate market acts in a cautious manner to reap the advantage of economic boom.
There are especially two main reasons that help the commercial construction industry for phenomenal performance and they are:-
- Impressive rate of growth of the domestic economy
- Rate of interest associated with the real estate loans need to be low
- Increased need for commercial for the industries like the IT industries
- Increased demand from the retail sector
- Increase in the corporate profit has led them towards expansion of business.
- Demand for warehousing increases with the increase in foreign trade which consequently expands the scope for commercial construction industry.
GE Real Estate is one of the largest companies in commercial construction industry in USA, Europe and Asia.