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Commercial vs Industrial Construction: 7 Differences Between the Two

  • November 10, 2023

Industrial and commercial construction are often thought to be one and the same, but the fact is that there are key differences in these types of projects that project owners must understand.

Although they are similar in some aspects — mainly that they aren’t residential — the differences in construction processes are significant.

This article will highlight 7 key differences between commercial and industrial construction projects.


1. What is Commercial Construction?

2. What is Industrial Construction?

3. 7 Key Differences Between the Two

4. Conclusion

What is Commercial Construction?

The construction of structures to house commercial businesses for the public is called commercial construction. 

This includes (but is certainly not limited to):

  • Retail stores
  • Shopping malls
  • Restaurants
  • Hospitals
  • Gyms
  • Office buildings 

Basically, the construction for any business whose purpose is selling goods and services is considered commercial construction. 

What is Industrial Construction?

The construction of structures designed for manufacturing and production is called industrial construction. 

Some examples are:

  • Manufacturing facilities
  • Power plants
  • Factories
  • Warehouses

There are two categories of industrial facilities: primary and secondary. Primary industries take raw materials from nature. Agriculture, logging, mining, natural gas, and oiling are examples of primary industries.

Secondary industries purchase the raw materials from primary industries and use them to create something new. Oil refineries, heavy and light manufacturers, paper plants, and food processing plants are examples of secondary industries. 

For the purposes of this article, most industrial construction we will be discussing will fall within the secondary industries. 

7 Key Differences Between the Two

Now that you know the definitions, let’s dive deeper into how this changes the construction approach from commercial to industrial buildings. 

1. Building Interior


In commercial construction, the building’s interior must be appealing to the customers. It should be inviting, cozy, and fitting for the type of business. 

Since there will be many customers traveling in and out, the interior should promote easy navigation for foot traffic and meet occupancy requirements.

The floor plans in commercial construction will vary significantly based on the type of service provided.

For example, restaurants require a kitchen and plenty of floor space for tables and chairs for their patrons. Shopping malls will need a large open hall connecting shops, and office buildings should have smaller rooms and a common area.

On the other hand, industrial construction focuses on functionality and efficiency with little care about appearances. 

While commercial is mainly about the customers, industrial is all about the machinery and the workers. Industrial facilities need room for heavy machinery. They will want larger doors, higher ceilings, and wider hallways.

Safety measures and workspace should still be a priority in industrial construction.

2. Building Exterior

Again, since commercial construction is all about the customers, the building’s exterior needs to draw them in. The design of the facade is crucial. It needs to be pleasing to the eye and clearly identify the business. 

Also, a large part of commercial construction involves providing accessibility by way of roads and plenty of parking spaces for the expected amount of traffic. 

Although the exterior beauty of industrial structures isn’t as important for commercial, it doesn’t mean they can’t look good.

Industrial construction also involves providing roads and parking, but the approach differs. Industrial buildings will need easy access for delivery trucks to come in and out without extreme difficulties backing up. This often means docking bays, larger roads, and multiple entrances and exits. 

3. Location

Commercial properties need to be near residential areas to succeed. 

In fact, commercial structures are usually placed in clusters to make it easy for customers to visit multiple commercial buildings at once.

If the business is in the city, it is usually close to the city center. If it’s in a smaller town, companies will want to be near the neighborhoods they serve.

Location is key to the success of the business.

Industrial buildings are typically in a location that makes more logistical sense. This should be easily accessible to transport. For example, they would be near highways, airports, ports, railways, etc.

They also usually aren’t near residential areas due to health concerns from the smoke or chemicals. (In fact, laws prohibit them from being near residential neighborhoods, which we’ll discuss in more detail later.) 

One thing industrial buildings have in common with commercial is that they are often clustered together by industry to allow for easier transport from one plant to another.


MEPS stands for the mechanical, electrical, and plumbing systems of a structure. As you can imagine, the needs and designs of these systems from commercial to industrial construction vary greatly.

In commercial design, most buildings will have one central electrical system and HVAC that distributes the air and electricity throughout the building.

The temperature should be easily adjustable to meet tenant needs.

The plumbing in commercial construction is similar to residential, only at a grander scale, and is often connected to other commercial buildings on a grid.

With industrial structures, MEPS is often beefed up and will sometimes require a custom-made system to meet the needs of the machinery.

Heavy equipment requires a greater power supply and a backup generator. 

Some manufacturing plants will also demand a constant water supply and larger pipes for this extra flow. 

Industrial businesses can compartmentalize their systems so that if one goes down, they have a backup system ready to go. 

5. Regulations

Any construction project must follow the rules and regulations of the local and federal governments, but those that apply to commercial construction are different than those concerning industrial. 

This is true in zoning, permitting, inspections, licenses, and building codes. 


When we discussed location, we touched on regulations concerning commercial and industrial construction. This is through zoning.

Local governments will dictate how a piece of property is permitted to be used by providing them with a zone. 

Zoning also explains how big the lot can be and how far back from the road a structure must be placed. This measurement varies based on the location of the site.

Commercial real estate zoning is relatively lax. Commercial buildings must be far enough from the road to provide room for utilities.

On the other hand, industrial land is severely restricted due to noise and environmental factors. 

Many industrial businesses will produce excessive noise that could be bothersome to residents nearby. They also result in a lot of smoke and/or chemical pollution in the surrounding air. 

Therefore, industrial properties must be a certain distance from residential areas, and the buildings must be further back from the road than commercial buildings.

Permits, Inspections, and Licenses

Commercial and industrial projects need permits before beginning construction, along with inspections afterward by local authorities.

Commercial projects may require licenses from the health department, such as with restaurants or any other business dealing with food. Hospitals and other medical facilities must pass inspection from the health department as well. 

Industrial projects will also need to secure permits, but need permission from city, state, and sometimes even federal authorities before they begin.

Most industrial permitting needs to be approved by the environmental management branch of the state authorities and the federal EPA. They may require project managers to follow certain guidelines to protect local vegetation, wildlife, bodies of water, and wetlands. 


Depending on the type of construction, specific building codes must be met. Building codes will ensure that the structure is up to the standards set by the International Codes Council

Industrial construction will have different codes based on the work type. For example, manufacturing plants will have different codes than distribution centers.

These codes focus on the safety of the workers and customers that will be inside the building.

6. Scale of Construction


Regarding the process and complexity of construction, industrial and commercial vary greatly.

Most commercial projects will already have city planning and utilities set up, so the construction site needs no consideration for these.

Although industrial buildings are generally larger, commercial buildings can be skyscrapers. Even so, commercial construction projects are usually smaller in size than industrial with a shorter timeline and smaller budget. 

Since commercial buildings are close to residential areas, they will have plenty of residents to be employees, so they don’t have to worry about making room for residential buildings.

Industrial construction usually involves the erection of huge structures with complicated and heavy components. Some will need to house a residential area within the site to make homes for employees.

Industrial projects are larger undertakings that require a more extended timeframe and a larger budget to purchase materials and pay for labor.

Learn more: Mastering Construction Budgeting: A Comprehensive Guide

7. Project Management

Both commercial and industrial builds require good project management and quality construction. However, there are a few key differences between their given approaches.

Commercial construction management is more straightforward. Less skill and knowledge are required from both the project manager and the construction team. This is because most of these tasks stick to traditional construction techniques. 

This simplifies the project bidding process since the prospective contractors and subcontractors are easier to vet and aren’t expected to have more than ordinary expertise. 

Also, finding the materials needed to complete the project is more manageable. Large windows, designer fixtures, and special orders are only slightly more challenging to find. 

Industrial construction management, however, is more complicated.

First of all, site procurement is much trickier for industrial projects than for commercial ones. Specialized training, industry experts, and often several different construction teams are needed to complete most industrial projects.

In fact, a special team may be needed just to install the heavy equipment or custom fabrication that the business will use. Industrial construction may employ modular or prefab construction techniques to allow each section to be built in a controlled environment that protects the expensive electrical components. 

Planning an industrial or factory layout requires in-depth knowledge of how the business is run, maximizing efficiency. 


Tackling commercial and industrial construction projects differently is vital due to the key factors separating them. 

It is always wise to find a firm that has experience, expertise, and even accolades to prove their skills in your specific sector. The best construction firms have experience and expertise in all sectors. 

FMP Construction thoroughly understands the difference between the two and the best construction methods for both. Together, we can make your vision come to life with durable, sustainable, and beautiful structures that propel your business goals forward.

Contact FMP Construction today!

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