7 Most Profitable Types of Construction Business in 2022
The construction industry is one of the most lucrative sectors in the world, with a global market value of over $11 trillion in 2020. However, not all types of construction business are equally profitable. Some have higher profit margins, lower risks, and more opportunities than others. In this article, we will explore the 7 most profitable types of construction business in 2022, based on the current trends and forecasts.
1. Green Building
Green building is the practice of designing, constructing, and operating buildings in a way that minimizes their environmental impact and enhances their performance. Green building can reduce energy consumption, water use, waste generation, greenhouse gas emissions, and operating costs, while improving indoor air quality, comfort, health, and productivity. According to a report by Research and Markets, the global green building market is expected to grow at a compound annual growth rate (CAGR) of 10.26% from 2020 to 2025, reaching $364.6 billion by 2025. Some of the factors driving this growth are the increasing awareness and demand for sustainable solutions, the supportive government policies and regulations, the rising investment and innovation in green technologies, and the growing social responsibility and reputation of businesses.
2. Modular Construction
Modular construction is the process of building structures using prefabricated modules that are assembled on-site. Modular construction can offer several benefits over traditional construction methods, such as faster completion time, lower cost, higher quality, greater flexibility, less waste, and improved safety. According to a report by Mordor Intelligence, the global modular construction market is expected to grow at a CAGR of 6.5% from 2020 to 2025, reaching $107.21 billion by 2025. Some of the factors driving this growth are the rising urbanization and population growth, the shortage of skilled labor and housing supply, the increasing demand for energy-efficient and affordable buildings, and the advancement in digital technologies.
3. Residential Construction
Residential construction is the type of construction that involves building houses, apartments, condos, townhouses, and other dwellings for people to live in. Residential construction is one of the most stable and resilient segments of the construction industry, as it is driven by the fundamental need for shelter and influenced by the economic conditions, demographic trends, consumer preferences, and government policies. According to a report by Grand View Research, the global residential construction market is expected to grow at a CAGR of 4.8% from 2020 to 2027, reaching $8.29 trillion by 2027. Some of the factors driving this growth are the rising disposable income and living standards, the increasing urbanization and migration, the growing demand for smart homes and green buildings, and the supportive government initiatives and subsidies.
4. Commercial Construction
Commercial construction is the type of construction that involves building offices, retail stores, hotels, restaurants, warehouses, hospitals, schools, and other non-residential structures for businesses or public use. Commercial construction is one of the most dynamic and diverse segments of the construction industry,
as it is driven by the changing needs and demands of various sectors and industries. According to a report by Fortune Business Insights,
the global commercial construction market is expected to grow at a CAGR of 5% from 2019 to 2026,
reaching $14.9 trillion by 2026.
Some of the factors driving this growth are
the rapid economic development and industrialization,
the increasing investment in infrastructure and urban development,
the rising tourism and hospitality sector,
and the growing adoption of smart buildings and automation technologies.
5. Heavy Civil Construction
Heavy civil construction is the type of construction that involves building large-scale public works such as roads,
bridges,
dams,
airports,
railways,
tunnels,
and water systems.
Heavy civil construction is one of the most complex and challenging segments of the construction industry,
as it requires high levels of engineering expertise,
technical skills,
coordination,
and management.
According to a report by BCC Research,
the global heavy civil engineering construction market is expected to grow at a CAGR of 7% from 2019 to 2024,
reaching $2.44 trillion by 2024.
Some of the factors driving this growth are
the increasing population and urbanization,
the rising demand for transportation and mobility,
the growing need for water supply and sanitation,
and the expanding renewable energy sector.
6. Specialty Trade Contractors
Specialty trade contractors are those who provide specialized services or skills for specific aspects or phases of a construction project,
such as plumbing,
electrical,
roofing,
painting,
landscaping,
and flooring.
Specialty trade contractors are an essential part of the construction industry,
as they ensure the quality,
functionality,
and aesthetics of a building or structure.
According to a report by IBISWorld,
the global specialty trade contractors market is expected to grow at a CAGR of 4.1% from 2019 to 2024,
reaching $5.18 trillion by 2024.
Some of the factors driving this growth are
the increasing demand for renovation and remodeling projects,
the rising complexity and diversity of construction projects,
the growing need for energy efficiency and sustainability,
and the shortage of skilled labor and expertise.
7. Construction Management
Construction management is the process of planning,
coordinating,
and overseeing a construction project from start to finish.
Construction management can involve various tasks such as
budgeting,
scheduling,
contracting,
designing,
procuring,
supervising,
controlling,
and evaluating.
Construction management is one of the most profitable types of construction business,
as it can generate high revenues and profits by charging fees or commissions based on the size,
scope,
and complexity of a project.
According to a report by Market Research Future,
the global construction management market is expected to grow at a CAGR of 9.8% from 2019 to 2025,
reaching $162.5 billion by 2025.
Some of the factors driving this growth are
the increasing number and scale of construction projects worldwide,
the rising demand for professional and efficient services,
the growing adoption of digital tools and platforms,
and the emerging trends and innovations in the construction industry.
The construction industry is a vast and diverse sector that offers many opportunities for entrepreneurs and investors who want to start or grow their own business. However, not all types of construction business are equally profitable. Some have higher profit margins, lower risks, and more opportunities than others. In this article, we have explored the 7 most profitable types of construction business in 2022, based on the current trends and forecasts. These are:
– Green Building
– Modular Construction
– Residential Construction
– Commercial Construction
– Heavy Civil Construction
– Specialty Trade Contractors
– Construction Management
If you are interested in any of these types of construction business, you should do your own research and analysis, evaluate your strengths and weaknesses, identify your target market and niche, develop your business plan and strategy, secure your funding and resources, and comply with the legal and regulatory requirements.
Most Profitable Type of Construction Business
According to some sources, the most profitable type of construction business is one that can provide a wide range of services to its clients, such as home remodeling, roofing, waterproofing, insulation, and custom design. These types of businesses are able to command a higher price for their services, as they can offer a more comprehensive package that meets the needs and preferences of their customers.
Global Demand for Construction Services
The global demand for construction services is expected to increase in the coming years, as the world population continues to grow and urbanize. According to a report by Global Construction Perspectives and Oxford Economics, the global construction market is projected to grow by 85% to $15.5 trillion by 2030, with China, the US, and India accounting for 57% of the total growth. Some of the factors that will drive the demand for construction services include:
– The need for more housing, infrastructure, and public facilities to accommodate the growing urban population
– The need for more energy-efficient and sustainable buildings to reduce greenhouse gas emissions and environmental impact
– The need for more resilient and adaptable buildings to cope with natural disasters and climate change
– The need for more innovative and digital solutions to improve productivity, quality, and safety in the construction industry
References:
https://www.vodafone.com/content/annualreport/annual_report14/downloads/full_annual_report_2014.pdf
http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2013/10k_2013.pdf
[Global Construction 2030 – A global forecast for the construction industry to 2030](https://www.globalconstruction2030.com/)
[30 Profitable Construction Business Ideas In 2023 – ProjectPractical](https://www.projectpractical.com/30-profitable-construction-business-ideas/)
[61+ (BEST) Most Profitable Construction Businesses to Start – HPD TEAM](https://www.hpdconsult.com/profitable-construction-businesses-to-start/)
[What Type of Construction is Most Profitable?](https://heavymachineryworld.com/most-profitable-type-of-construction/)
