With the economic situation improving around the world, more industries are looking to take advantage of new areas. These actions can have a positive effect on the cities that industry members invest in, as well as other industries in these regions.
Unconventional energy exploration is on the rise throughout North America, and these actions are having a notable effect on the commercial real estate industry in the area, according to a report from CBRE Group, Inc. This was due to the energy sector providing the ability to have a positive effect on local markets, even though it is a more global entity.
This could continue to play a role in the region during the next several years due to the fact that technological advancements are continuing at a significant rate, the report showed. While many industries have a boom and bust cycle, this may not be the case for commercial real estate, due to how much growth is available.
For the commercial real estate market in these areas, there may be continued development to help meet the demand of the energy industry, the report noted. The reason for the expected growth is the immediate stress on availability that comes from rapid expansion of the unconventional energy industry.
American construction experiences slight improvement
While the growth in energy exploration could help strengthen construction, the United States already experienced some gains. According to a report from McGraw Hill Construction, overall construction starts rose to a rate of $533.7 billion in April compared to the same point in 2013.
"With construction starts now climbing for two months in a row, it's become more apparent that some of the lackluster activity in early 2014 was due to tough winter weather conditions," said Robert Murray, chief economist for McGraw Hill Construction. "On the plus side, nonresidential building is strengthening once again, after slipping in recent months. The commercial and manufacturing categories are regaining momentum, while institutional building is making the transition to an up-and-down pattern after its steady decline over the past five years."
For the first four months of 2014, the construction spending level rose to $153.8 billion, the report explained. This was no different from the same period in 2013.
Nonresidential construction rose to a rate of $202.8 billion during April, 14 percent higher than 12 months earlier, the report added.