CHAPTER 1: INTRODUCTION TO THE BUILDING INDUSTRY | 5
(AEC) Industry, or even the Architecture / Engineering /
Construction / Operation (AECO) Industry. People
frequently use these terms interchangeably, and I will also do
so throughout this book. The industry typically focuses on all
the employees and tasks required to plan, design, construct,
operate, and manage the delivery and operations of the built
environment (commercial buildings, infrastructure and
industrial facilities). It is important to note that when people
use the term ‘Construction Industry’, they are typically
referring to the design, construction and operations of
facilities, not just the process to deliver a new facility. And
when they use the term ‘Building Industry’, they are typically
discussing all types of facilities, not just commercial and
residential buildings.
The industry can be separated into different categories. One
common breakdown is by the type of owner, and in particular,
if the owner is a private entity (an individual or company) vs.
a public (or government) entity. Another is to separate the
industry by the type of facilities that are constructed. In this
manner, we can separate the industry into four broad areas:
1. Commercial Buildings;
2. Infrastructure;
3. Industrial; and
4. Residential.
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See the following information for some common definitions of
these sectors.
Commercial Buildings: Buildings
and enclosures that contain a structure with enclosed space
with an enclosure system with a non-industrial purpose. They
may be fully enclosed, such are apartments or office buildings,
or they may be partially open such as stadiums or monuments.
Examples of buildings include office buildings, apartments,
hospitals, rail stations, stadiums, arenas, and many more.
Commercial buildings are typically designed by an architect.
There may be many different types of owners.
Infrastructure: Infrastructure
facilities serve as core facilities that serve the public, which
are not buildings. This category is sometimes referred to as
‘heavy’ construction. Examples include roads, bridges, dams,
locks, and tunnels. These facilities are typically funded by the
government. The design is typically led by an engineer such as
a civil engineer. New infrastructure projects typically require
a long planning and design phase.
CHAPTER 1: INTRODUCTION TO THE BUILDING INDUSTRY | 7
Industrial: Industrial facilities
house core industrial processes, and the design of the facility is
focused on the industrial process. Examples include refineries,
power plants, chemical plants, manufacturing facilities. The
design of these facilities is heavily dependent on the process
that they support, so they are frequently designed by specialty
engineers in collaboration with civil engineers. Most of these
projects are privately funded. Many of these projects are
schedule-driven in order to start the process as soon as possible.
Residential: Residential buildings
are built to house individuals or families. For the purpose of
defining markets, the residential sector is focused on single-
family detached housing or duplexes. These structures are
typically wood, and they may be designed by an architect, or
even a residential builder. While there are large-scale
residential developers, many residential buildings are built by
smaller companies. The barriers to entry into the residential
market are less than other sectors since the buildings have a
lower cost and lower level of sophistication.
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Note that this is not a perfect set of categories since it is
sometimes difficult to define clear lines between the categories,
as well as defining how to separate a large project into smaller
components, but these categories do help us define the types
of players in each market, and the typical characteristics of
these different market sectors. Residential construction is a
unique sector of our industry, and the market conditions for
residential construction can vary significantly from the rest of
the industry.
The construction industry is a major source of employment,
especially if you also consider all the manufacturing industries
that are supported by construction. In the United States, in
2016 it was estimated that the Industry was employing 7.3
million workers (2018 data) (see Fig. 1-2). This is 4.5% of the
overall workforce. The Bureau of Labor Statistics is estimating
that the workforce will grow at a rate of 1.1% per year between
2018 and 2028 (https://www.bls.gov/emp/tables/
employment-by-major-industry-sector.htm). In more recent
statistics (see Figure 3), the industry employs over 7.5 million
people. 14% of these jobs are current employees who are
members of a union, which is down from 17.5% in 2000,
although quite steady over the past 7 years. Note that these
employment figures do not include all professional service
employment related to the industry, nor do they include all
the manufacturing jobs related to building supplies or
transportation services for products to be shipped to the
jobsite.
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Figure 1-2: Employment Projections for Industry Sectors from
the US Bureau of Labor Statistics (Source: https://www.bls.gov/
emp/tables/employment-by-major-industry-sector.htm accessed
Jan. 2, 2020)
It is important to note that the numbers of employees
within the construction industry can be significantly impacted
by economic conditions. Figure 3 shows the construction
sector employment against time. As you can see from the
graph, the economic recession in 2007 and 2008 had a very
significant impact on employment, going from approximately
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7,600 employees in 2006 to 5,500 in 2009. This significant
employment fluctuation can be a significant challenge. Once
people leave the industry, it can be challenging to hire new
workers. In fact, the most frequently cited challenge of general
contractors right now is the lack of a skilled workforce.
Figure 1-3: Employment Trend for Construction Employment
from 1985 to 2018 (Source: US Bureau of Labor Statistics
accessed Jan 2, 2020)
While the size and scale of the industry is impressive, this
overall size and the nature of developing the built environment
can also have significant negative impacts on environmental
sustainability. Buildings account for 39% of all greenhouse gas
emissions, and 70% of all electricity use (http://www.eesi.org/
