This category covers general contractors primarily engaged in the construction, alteration, remodeling, repair, and renovation of industrial buildings and warehouses, including aluminum plants, automobile assembly plants, food processing plants, pharmaceutical manufacturing plants, and commercial warehouses. General contractors working on nonresidential buildings other than industrial buildings and warehouses are classified in SIC 1542: General Contractors—Nonresidential Buildings, Other Than Industrial Buildings and Warehouses.
Commercial and Institutional Building Construction
Manufacturing and Light Industrial Building Construction
Like all construction activity, this category of nonresidential construction is crucially dependent on overall U.S. and regional economic health. Specifically, construction of industrial building and warehouses is intimately tied to trends and conditions in the U.S. manufacturing sector; individual projects are, moreover, bound to the economic health of whichever industries are sponsoring those projects.
Therefore, when the U.S. economic bubble of the late 1990s burst, spending on industrial buildings and warehouses began to wane. Employment in the manufacturing sector fell throughout 2001 and 2002, as did industrial production. As a result, spending on new manufacturing plants and warehouses experienced a dramatic slowdown. This downward trend was expected to continue through 2002, according to a May 2002 issue of Building Design and Construction.
In this sector of the construction industry general contractors generally bid for a project, assuming responsibility for the project's planning and overall development. Often, however, the general contractor delegates performance of many specific tasks to specialty subcontractors.
Once a contractor is chosen to undertake a given project, he or she often remains in close communication with its owner over many aspects of construction detail while at the same time coordinating the work of various subcontractors and teams of employees. Given the inherent complexity of this arrangement, successful management proved one of the industry's greatest challenges. Project often fail due to miscalculation of budgets and missed deadlines, often attributed to the lack of an efficient communication process between contractors and owners.
Contractors benefited from the booming U.S. economy in the late 1990s, in particular the raging stock market, which encouraged investment in new buildings and...