When it comes to commercial construction projects, you will find that several offices have expanded and updated their business operations and spaces. However, in 2022, one will find that several offices are ready to renew their leases this year and will not opt to shift to a new place. This step will cause a ripple in the construction sector and result in a slowdown in the number of projects in the commercial construction industry and its job creation.
Kanat Sultanbekov New York-a slowdown in commercial construction projects does not mean the industry will not recover
Kanat Sultanbekov is a respected name in the commercial construction market in New York. According to him, commercial construction is not the same as residential construction projects and involves building retail spaces, warehouses, and office buildings. Projects are taken for updating or building homes.
According to Kanat Sultanbekov New York, the commercial construction sector has witnessed a boom in the past years. Businesses are now looking to expand their operations in updated and new office spaces. This has resulted in potent growth in this sector, and the number of jobs in the industry has increased by about 9% between the years 2020-2022, as per the US Bureau Of Labor Statistics.
Expiry of commercial construction leases
In context to the above several commercial construction leases are about to expire in 2022. According to reports released by JLL, a respected name in the commercial real estate field, about 8% of commercial construction company licenses are likely to expire this year, and this is the most significant percentage in the next decade of any year. This will cause a slowdown in the commercial construction sector as businesses to select to renew their prevailing leases over moving to a new premise.
The present state of the economy is another significant factor that one should consider regarding the pace of commercial construction projects coming up this year. The coronavirus pandemic resulted in a recession in 2020, and there is no surety as to how long it might take for the commercial construction market to recover. If this recovery lasts longer than expected, many businesses will be hesitant to invest in brand-new construction projects.
Will workers be affected by the slowdown of commercial construction projects?
According to Kanat Sultanbekov New York, the slowdown in commercial construction will have a ripple effect on the entire construction sector in the nation. For instance, if there is a slowdown in the industry, there will be a lesser demand for jobs, so opportunities for workers experienced in the industry will reduce. This trend again will lead to reduced prices for materials used for building and construction, resulting in a decline in the revenue for companies specializing in construction. This might mean more layoffs, and the industry’s slowdown of commercial construction projects might increase.
However, once these lease renewals are over, there will be a rebound of commercial construction projects in the industry, so experts in the field are optimistic!