Global Industry Overview: Construction, Residential Building
Contractors in this segment of the world's construction industry create new residential structures, including single- and multifamily dwellings, as well as additions, alterations, remodeling, and repairs to residential buildings. For details on other aspects of the construction trades, see also Construction, Nonresidential Building and Engineering Services.
While most residential buildings – whether for single families or multiple families – are constructed by local, domestic, small-scale operations, an estimated one-fifth of all construction worldwide is performed by large-scale companies. The international residential construction industry is dominated by well-funded U.S., European, and Pacific Rim (particularly Japanese) companies.
During the early years of the first decade of the 2000s, decline in the Japanese and other Asian economies hit their domestic construction markets hard. The most telling sign of the financial times was the dramatic reduction in the amount of money Japan spent on construction. While the industry was strong in the early 1990s, by 2002 the number of new building contracts had significantly declined – largely because of concerns about high vacancy rates. Analysts projected that investments in Japan's domestic construction industry would continue to decline. Nevertheless, employment in the construction industry and the number of new small construction companies entering the tough market rose due to the fact that the government spent US$550 billion on public works in the mid-1990s. The economy continued to suffer in subsequent years, however, because of this and other deficit spending.