E-commerce Expansion Forces Commercial Construction to Innovate

    The recent outlook report from FMI predicts the commercial construction industry will slow to 6 percent in 2014 – scaled back from the 7 percent growth predicted earlier this year.

    What’s driving this? One factor is the sluggish retail production from the ever-expanding e-commerce market.

    Just look at the holiday gift-delivery debacle of 2013 where a combination of bad weather, last-minute shoppers and – most importantly – an overwhelming surge in online gift-buyers meant many customers didn’t receive their presents in time for the holidays.

    While ecommerce remains a small percentage of overall retail sales, there’s no denying where the new business trends are headed and the role technology is playing in those market shifts. As Americans spend more of their lives online, technology is redefining our perceptions of “traditional” retail.

    Choosing Innovation to Power Forward

    With predictions of a slower-than-hoped recovery – which is still projected ahead of the overall GDP growth – commercial construction companies can (and should!) choose to look toward the opportunities.

    Industries do not stay the same over generations. They are dynamic. Any market – retail included – is bound to get crowded. Those who innovate will propel their companies forward toward market improvements.

    What other factors impact the commercial construction outlook? Beyond retail, some additional drivers include:

    1. Unemployment rates
    2. Income
    3. Housing starts
    4. New building permits

    These drivers are influencing emerging trends nationally that we’re also seeing for commercial construction in East Tennessee:

    1. Working leaner by becoming more efficient and competitive in the sector
    2. Using innovative pre-fabrication and modular construction methods
    3. An increase in multiuse projects

    Perhaps this quote from former General Electric CEO Jack Welch says it best: “Control your own destiny or someone else will.”

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