Commercial Report: Retail construction will keep the commercial market robust

The commercial market has been expanding steadily for three years, in pace with the overall economy, and will continue doing so for several more years. Consumer income and spending growth slowed over the past year, but surged higher in April.

The depressing impact of high energy prices and ebbing home values will keep consumer spending growth slightly below GDP growth through 2008, but it will expand fast enough to support adding retail space. Construction of shopping centers and malls is expanding rapidly while construction of standalone buildings is growing slowly, except drug stores and restaurants.

Jobsite construction spending for multi-retail buildings in April was 20% higher than a year earlier. Spending for large shopping malls was up nearly 40% over the last year.

The value of commercial construction starts is up 20% through May compared to the first five months of last year, according to Reed Construction Data.