Commercial vs. Industrial Construction: 7 Key Differences

Published Categorized as Infrastructure
Industrial Construction

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.

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.

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.

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.”

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.


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.


By Giovanni Valle

Giovanni Valle is a licensed architect and LEED-accredited professional and is certified by the National Council of Architectural Registration Boards (NCARB). He is the author and managing editor of various digital publications, including BuilderSpace, Your Own Architect, and Interiors Place.

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