Commercial vs. Industrial Construction: 7 Key Differences (2023)

Commercial and industrial construction focus on buildings that aren’t dedicated to housing. Because of this, it may appear on the surface that both endeavors are similar. However, there are many differences between the two, particularly with regards to the stages that these projects go through.

The most significant differences between commercial and industrial construction are location, design, scale, and the permitting process. This is due to the purpose of each facility: commercial buildings need to serve people, while industrial structures are for the production and transportation of goods.

While there are many similarities between the two, they each have unique needs that require varying techniques and structures. By the end of this article, you’ll have a better understanding of the differences between these two construction types.

Comparison: Commercial vs. Industrial Construction

Buildings have different requirements, and many construction projects will fall under the category of commercial or industrial construction. Here are some examples of structures that fall under these two categories:

  • Commercial construction refers to structures that aim to serve the public, including restaurants, hotels, retail stores, physical fitness facilities, offices, and hospitals.
  • Industrial construction refers to structures that produce commodities for distribution, including factories, microchip centers, power plants, and cooling systems.

The varying uses of these structures are the most crucial because they determine everything the project needs. Commercial establishments are the ones that serve people, while industrial buildings focus on manufacturing. It may not seem that big of a difference, but it determines four things:

  • Where the structure is built.
  • How it’s built, and the techniques needed to perform the task.
  • The infrastructure needed to complete the project.
  • Permits that are required to start its operation.

Keep these examples for commercial and industrial structures in mind, as we’ll use them throughout the article. Although all of them have different requirements for the businesses’ operations, we can still categorize them using the building’s purpose.

1. Location of the Building

The location of the building and planning of the structure is the most significant difference between the two. Remember, the purpose of commercial construction is to build structures that serve people. So, it’s location should be in a place that is accessible to them. It’s why city planning – or local planning and zoning boards – always design “commercial” areas to be at the heart or close to the city center.

Of course, it’s possible to have commercial establishments anywhere. But these buildings serve people, and owners want to maximize the accessibility of their business. In many cases, commercial buildings are clustered together in a small area to make it easier for people to access all of them. It’s not always the case, though, because there are retail stores, restaurants, clinics, and fitness facilities that only aim to serve a small community.The key to commercial construction is foot traffic. Buildings are typically placed in a location that is accessible to the market that the business is trying to serve. If the goal is to serve a small community, then it makes sense to have the establishment closer to the desired market. However, if the goal is to access a larger market, then the building needs to be close to the city center.

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Industrial construction takes a very different approach to location. Manufacturing plants focus on producing the products the business sells. Since it requires transporting to various locations, it should be in a place that provides easy logistical access. That’s why manufacturing plants that serve the global market are always close to airports and seaports. It reduces the time needed to transport goods and lowers the logistical costs.

Unlike commercial construction projects that can be built anywhere, it’s unusual for a manufacturing plant to be close to residential areas. Aside from health concerns, there are also road limitations. There’s a significant difference in the vehicles used to transport people and the ones used to transport goods. Even small manufacturing plants for small businesses still need easy access to major highway networks to speed up logistics.

Aside from the ones mentioned, the location can also limit the ability to source materials for the production. If the manufacturing plant is far from highway networks, railroads, airports, and seaports, it will be challenging to move products in and out of the facility.

If there are “commercial areas” that make it easy for people to access essential services, there are also “industrial areas” where manufacturing plants are clustered together. It’s an efficient way to reduce the production cost and speed up the transport of products from one plant to another.

The key to industrial construction is logistics. Instead of people, products come and go. It needs larger vehicles to transport, making highways, railways, airports, and seaports vital to the operation. If the goal is to only deliver the goods nationwide, access to roads that lead to the desired market is necessary. On the other hand, if the goal is to enter the global market, being closer to seaports and airports becomes a priority.

2. Exterior Infrastructure

Accessibility is the most significant difference between the two, and it includes the exterior infrastructure. If a structure aims to serve people, the facility should provide enough space for transportation. When designing a building, the most important thing is accessibility to roads and public transportation.

Parking lots are also important, especially for retail stores, because people will come and go. You have to ensure smooth traffic flow, especially during peak hours. Remember, these buildings aim to serve people, and no one wants to travel too long to get what they need. Accessibility plays a significant role in a commercial building’s design. In fact, it will determine almost every facet of the structure.

On the other hand, most industrial buildings only focus on production. In the case of a manufacturing plant, the exterior infrastructure needs enough space to accommodate delivery trucks, both for the raw materials and finished products.

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Of course, it may not be necessary if the project is a power plant, a cooling system, or a water treatment facility. Industrial buildings need much larger vehicles, making it a crucial factor to consider during the design phase.

Industrial buildings also need roads for workers, but it’s not as important as commercial structures. Aside from this, there are large scale manufacturing plants that also provide housing for the workers. These are why transportation and accessibility are less important factors to consider when it comes to industrial construction.

3. Interior of the Building

The workflow determines the interior of the building, creating another key difference between commercial and industrial construction.

If you think about the one thing that groceries, offices, restaurants, retail stores, and fitness centers have in common, it’s foot traffic. All of these facilities get a lot of people at the same time of the day. The interior can have a massive impact on traffic flow, significantly affecting a commercial business’ profit and repeat business.

Most commercial businesses rely on repeat customers. They need to provide the best experience while inside the facility. This experience starts with how fast customers can get what they need. This doesn’t apply only to customers: offices, especially the ones that house multiple businesses, should also provide easy access to employees. They should get to where they need to go as quickly as possible.

All of these things should be considered to make a structure ideal for the business. In many cases, the interior of a commercial building will depend on the service that they provide. Hospitals should have wider corridors, while offices should have accessible common areas. One design doesn’t apply to other buildings because of the varying business requirements.

On the other hand, industrial buildings mainly deal with the use of heavy equipment. Everything in industrial buildings is larger or taller – bigger doors, wider corridors, higher ceilings, and higher shelves. If a building is for the manufacturing of goods, it should have enough space for the machines used for production.

Many people view grocery stores as glorified warehouses, making it the ideal point of comparison. In grocery stores, shelves are needed for commodities, but the placement should favor traffic flow. You can’t have people go back and forth for the things they need because it adds to their time in the grocery store. The longer they stay inside, the more crowded it gets during peak hours.

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A manufacturing plant, on the other hand, should focus primarily on efficient workflow. Ideally, the production starts close to the delivery hub, while the finished products’ storage is close to the departure hub. This creates a smoother workflow, increasing the efficiency and production rate of the workers. Aside from this, a manufacturing plant should also have varying ceiling heights, depending on the room’s purpose.

4. Systems of the Internal Infrastructure

Internal infrastructure refers to the mechanical, electrical, and plumbing systems within a building. Most commercial buildings only need central electrical, plumbing, and HVAC systems in place. This facility will handle the distribution throughout the building, especially for structures that house multiple offices. There’s only one control for all of these because many commercial establishments have the same requirements for these systems.

However, some complex structures house different businesses with different requirements. Although these systems will remain centralized with only one control, it should have the capacity to adjust to what the tenant needs. It’s easier to set these systems up because people are the only ones who will use these systems.

Some industrial structures also have the same centralized electrical, plumbing, and HVAC systems, but on a bigger scale. Since these facilities will work with heavy equipment that requires heavy load, the systems should have the capacity to support everything that it needs. It’s the reason why “industrial-grade” products often have the highest quality when it comes to these services.

Sometimes, industrial facilities are so massive that having a centralized system for everything it needs isn’t feasible. For context, water services for commercial buildings only deal with up to 25 gallons per minute (GPM), while industrial buildings often require 25 up to thousands of GPM. That’s why some of these facilities compartmentalize their systems. It prevents the whole system from going down due to faulty wiring within the system.

5. Scale of Construction

The scale of construction also varies when it comes to commercial and industrial construction. Commercial buildings can be skyscrapers that house hundreds of different businesses and thousands of employees. Since these are in areas that are accessible to people, housing won’t be a problem.

Commercial facilities are, often, clustered together close to the city center, making all the essential services a person needs accessible. That’s why when you see a commercial construction site, you’ll see the builder focused only on the building itself. It doesn’t require further development because the infrastructure is already in place thanks to city planning and zoning ordinances.

On the other hand, an industrial project will always favor logistics over housing or essential services. That’s why some large scale industrial construction involves the development of a community within the area. In some countries, they even adjust the laws to allow that area to compete with global trade. These areas are the ones that we call “special economic zones.”

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These areas are close to railways, seaports, airports, and major highway networks – everything a company needs to increase efficiency in logistics. Sometimes, these areas are far from the community and aren’t accessible to people. That’s why they develop these areas to make it ideal for anyone but still efficient for manufacturing, production, and logistics.

6. Project Management

Buildings typically have different requirements. However, commercial construction is more streamlined. The materials and skills needed for building malls, offices, fitness centers, clinics, and groceries are the same. In fact, you can walk into any hardware store and find almost everything you need for commercial construction.

Builders of these establishments already have the suppliers and workers to meet established goals. Although there’ll be variations in design and structure, they can make it happen without requiring specialized skills. Some construction projects may still be complicated, but it’s more straightforward than industrial projects.

Industrial construction requires specialized skill, on-site equipment assembly, custom fabrication, and large-scale installation. Since each industrial structure is different, the process will be different in every project. Experience with one industrial construction doesn’t guarantee a seamless project because the requirements will always be different.

It will take more time than commercial construction, especially during the planning and development phase, because everything needs to be done according to the client’s specific requirements. Custom fabrication may be required for example. Sometimes, the project is so massive that the builder may need one or more subcontractors to lend their specialty to the endeavor.

7. Permits and Inspection Requirements

Every commercial building needs permitting before tenants can move in. It should also have all the occupancy requirements in place before it starts its operation. These requirements include permits from the local planning and zoning boards and municipal engineering offices. Some establishments may also need to secure a license to operate from health departments.

Although the permitting and inspection process will go through different local entities, it will be faster and more straightforward because the builder only needs to deal with local authorities. Some projects may require more than these permits. However, it’s uncommon for local authorities to require more if the project is for a commercial establishment.

Industrial construction also goes through the same process and requires the same permit from local authorities before it can operate. The only difference is that as the construction scale increases, the inspection and permitting becomes more complicated. Some industrial projects often require builders to acquire permits from the city, state, and the federal government.

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Commercial and industrial construction are endeavors that businesses need. Many companies may also require both structures, depending on the nature of the business. Although they have many key differences, most of the stages these construction projects go through remain the same.

So, just to recap everything we’ve covered, here are the seven key differences between commercial and industrial construction:

  • Location of the structure
  • The exterior infrastructure
  • The interior of the building
  • Systems of the internal infrastructure
  • Scale of construction
  • Project management
  • Permits and inspection requirements

Have you noticed anything about these differences? They’re all adjustments needed to adapt to the building’s intended use.



What is the differences between industrial and commercial construction? ›

Examples of commercial construction include offices, restaurants, hotels, stores, gyms, and hospitals. Industrial construction, on the other hand, focuses on business operations and often refers to factories, manufacturing facilities, power plants, refineries, and more.

What is the difference between industrial and commercial property? ›

Whilst industrial properties refer to any business related to manufacturing goods; commercial properties tend to a business that operates with the main motive of gaining profit.

What is commercial vs industrial examples? ›

Typical commercial applications include strip malls, office buildings, hospitals, schools, churches, hotels, condominiums, supermarkets, ice rinks, and maybe even light manufacturers. Common industrial applications include manufacturing, food processing or storage, chemical, petrochemical, and power plants.

What is the difference between commercial and industrial zones? ›

Typically, commercial zones involve businesses that interact with the public, like office buildings, shopping plazas, restaurants, hotels and entertainment venues. By comparison, industrial zones usually have manufacturing centers, warehouses, loading centers and similar structures that are closed off to the public.

What are examples of industrial construction? ›

Manufacturing Buildings
  • Heavy Manufacturing Buildings. Heavy-duty goods, such as cars or outdoor equipment, start their life in a heavy manufacturing building. ...
  • Light Assembly Buildings. ...
  • General Warehouses. ...
  • Distribution Warehouses. ...
  • Truck Terminals. ...
  • Research and Development Buildings. ...
  • Data Centers. ...
  • Showrooms.
May 19, 2021

What are the 4 types of industrial? ›

In economics, industries are generally classified as primary, secondary, tertiary, and quaternary; secondary industries are further classified as heavy and light.

What are commercial and industrial purposes? ›

Commercial or industrial use means any use conducted primarily for profit, except for agricultural use, open space use, single-family residential use, multi-family residential use, institutional use, recreational use or vacant land.

What is the difference between industrial and commercial waste? ›

Industrial waste is generally defined as any waste—liquid, solid or gas—that is a byproduct of industrial production. Commercial waste includes all waste resulting from doing business, not just industrial activity.

What is the definition of commercial construction? ›

What is Commercial Construction? Commercial construction involves the construction of buildings and other structures used for commercial purposes. It includes office buildings, retail stores, warehouses, factories, and more.

What are the 6 types of building construction? ›

Here are some of the building structures that are found in the field of construction:
  • Wood frame. Wooden frame buildings have been around for many years and in fact, this type of building structure is the oldest of them all. ...
  • Light gauge steel. ...
  • Steel frame. ...
  • Concrete frame. ...
  • Pre-engineered.
Apr 19, 2019

What are the 6 types of industrial property? ›

8 Types of Industrial Real Estate
  • Heavy Manufacturing. ...
  • Light Manufacturing. ...
  • Distribution Warehouse. ...
  • General Warehouse. ...
  • Flex Space. ...
  • Showroom Buildings. ...
  • Research and Development. ...
  • Data Center.
Apr 3, 2020

What is the difference between commercial premises and industrial premises? ›

Retail and office commercial property regularly interact with the general public while industrial real estate doesn't, with the latter mainly engaging with companies and large enterprises. Functionality and efficiency is key to an industrial property's success and value.

What is the difference between commercial residential and industrial buildings? ›

Use. Commercial construction is used by businesses and involves projects such as the building of offices, industrial facilities and other business establishments. Residential construction, on the other hand, will be in places where people live, such as in apartment, houses and other homes.

What is the difference between commercial land and industrial land? ›

Industrial property is used for industrial purposes. In other words, an industrial property is used for manufacturing purposes. Commercial property is used to sell the goods that are manufactured in industrial properties. Industrial property is less expensive than commercial property.

What's the difference between commercial and industrial electric? ›

Industrial electricians troubleshoot issues in manufacturing industries while commercial contractors complete electrical repairs and maintenance in mainstream workplaces.

What is the definition of industrial use? ›

Industrial use means use for or in a manufacturing, mining, or chemical process or use in the operation of factories, processing plants, and similar sites.

What are the three types of industrial? ›

Primary industry involves getting raw materials e.g. mining, farming and fishing. Secondary industry involves manufacturing e.g. making cars and steel. Tertiary industries provide a service e.g. teaching and nursing.

What are the 4 types of construction? ›

The four key types of construction include residential, commercial, industrial, and infrastructure, which covers nearly every construction project.

What is an example of a commercial building? ›

Commercial property includes office buildings, medical centers, hotels, malls, retail stores, multifamily housing buildings, farm land, warehouses, and garages.

What are the 8 types of industries? ›

On the basis of raw material: Agro-based industries, Mineral-based industries, Marine-based industries, Forest-based industries. On the basis of size: Small scale industries and Large scale industries. On the basis of ownership: Private sector industries, public sector industries and joint sector industries.

What are the 5 types of industry? ›

Industries and sectors
  • Agriculture; plantations;other rural sectors.
  • Basic Metal Production.
  • Chemical industries.
  • Commerce.
  • Construction.
  • Education.
  • Financial services; professional services.
  • Food; drink; tobacco.

What are the 4 factors of industry? ›

The factors of production are the inputs used to produce a good or service in order to produce income. Economists define four factors of production: land, labor, capital and entrepreneurship. These can be considered the building blocks of an economy.

What is the main purpose of a commercial? ›

Any advertisement done by a business with the purpose of promoting products and services to the public. Commercial advertisements are clever, funny, or profound messages that are memorable years after they first run on a medium. Mediums for commercials include: Radio.

What are the three types of commercial activities? ›

There are three main types of business activities: operating, investing, and financing.

What are the six main business and commercial laws? ›

They mainly include contract law, property law, corporate law, intellectual property law, tax law, negotiable instrument law, and uniform commercial code.

What is industrial and commercial waste called? ›

Industrial and commercial waste that is produced by the industrial activity which includes a useless material and produced during the manufacturing process in industries is called industrial waste. Basically, it includes. chemical. plastic. transparent.

What are examples of commercial waste? ›

Any waste produced by a business — including (but not limited to) paper, cardboard, cans, retail packaging, and food wrappers — is commercial waste.

Which industrial waste is commercially used in construction industry? ›

Fly ash: It is an industrial waste generated from thermal power plants. It is commonly used in the construction industry. The fly ash has a wider application in the production of the cement.

What is a Class 7 building? ›

Class 7 buildings. Class 7 buildings are storage-type buildings. The Class 7 classification has 2 sub-classifications: Class 7a and Class 7b. Class 7a buildings are carparks. Class 7b buildings are typically warehouses, storage buildings or buildings for the display of goods (or produce) for wholesale.

What are the 5 principles of construction? ›

The Five Construction Principles have been established so that the five elements: environmental protection, safety, speed, economy, and aesthetics, conform with a balanced regular pentagon.

What type of industry is construction? ›

The construction sector is part of the goods-producing industries supersector group. The construction sector comprises establishments primarily engaged in the construction of buildings or engineering projects (e.g., highways and utility systems).

What is the role of commercial in construction? ›

Commercial managers are responsible for the budget and keep on top of all the costs involved in large-scale construction projects. They source the services and resources needed, negotiating costs with other suppliers.

What is commercial construction contract? ›

A commercial building contract is an agreement between contractors and businessowners. Commercial construction contracts are made for the construction of non-residential buildings such as hotels, restaurants, entertainment centers, educational institutions, and many more.

What are the 8 stages of construction? ›

Here's the process:
  • Step 1: Design. During this phase, the client places a project for bidding. ...
  • Step 2: Pre-Construction. ...
  • Step 3: Procurement. ...
  • Step 4: Construction. ...
  • Step 5: Commissioning. ...
  • Step 6: Owner Occupancy. ...
  • Step 7: Project Closeout. ...
  • Step 1: Design.

What are the 5 stages of building construction? ›

This process can be broken down into five phases – planning/design, pre-construction, procurement, construction, and post-construction.

What are the 3 main types of structures? ›

There are three basic types of structures: shell structures, frame structures and solid structures.

What is considered commercial construction? ›

Commercial construction is the business of building and leasing or selling spaces in the private sector. These spaces can include but aren't limited to offices, manufacturing plants, medical centers, and retail shopping centers. Commercial construction projects and businesses primarily vary in size and scale.

What is the difference between commercial and industrial roofing? ›

Probably the biggest difference between commercial and industrial roofing is the size of the roof. In general, industrial roofs tend to be quite a bit larger than regular commercial roofs. Think of an Amazon warehouse, for example. Or a factory.

What is the main difference between a commercial building versus a residential building? ›

The main difference between residential and commercial construction projects is in the name. Residential construction is when housing is built (apartments, flats, and houses), while commercial construction involves industrial facilities, warehouses, and business establishments.

What is the difference between commercial and domestic construction? ›

A commercial construction company needs to understand that a building might house various business types within the same structure and design. Contrast to that, a residential building is usually a home or building with a primary purpose of housing people to live in it.

What does industrial mean in commercial real estate? ›

Industrial Real Estate can be defined broadly as any/all land and buildings which accommodate industrial activities including production, manufacturing, assembly, warehousing, research, storage, and distribution.


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