Industry Analysis & Industry Trends
The Commercial Building Construction industry has endured a tumultuous period over the past five years because its primary markets plummeted and took industry operators down with them. Private investment in commercial and industrial premises slumped in response to adverse trends in company profitability, employment and household spending. In the public sector, the government's fiscal austerity measures involved cuts to funding for institutional buildings like schools and hospitals. Many companies went bust as business profit plummeted, retailers were hit by online competition and consumer spending fell. Various retailers, including supermarkets and department stores, scaled back their expansion plans, and lack of demand for offices caused property developers to halt investment too... purchase to read more
Industry Report - Industry Investment Chapter
The industry has a moderate level of capital intensity. Contractors add most of their value by providing project management and specialised construction skills, and the capital requirements for operating in the industry are relatively low. Depreciation is estimated to account for 1.7% of industry revenue. Operators mainly get access to equipment by leasing it on a project-by-project basis or by subcontracting to specialist providers such as crane operators and excavation contractors, which keeps investment in depreciable assets low.
Wage costs, payments to subcontractors and professional consultants' fees absorb at least two-thirds of industry revenue, but direct employment costs account for just 12% of revenue in 2014-15... purchase to read more