U.S. JOB GROWTH VS. NET ABSORPTION
- There has been a clear upward trend in job growth since the bottom in 2009 and industrial demand has followed suit. After a considerable decline in demand in 2009, the industrial sector has absorbed 174.8 msf of direct space nationally in the last two years.
- Since peaking in 2009, overall vacancy rate has dropped by more than two percentage points to end 2012 at 8.3%. Along with steadily improving vacancy, rental rates, and absorption, new construction has picked up notably. More than 35.6 msf of construction were completed nationwide, compared to 20.5 msf in 2011 and only 15.9 msf in 2010. However, this is far below levels seen from 2005 to 2009, where on average almost 105.0 msf were completed each year.
- At the end of 2012, more than 42.4 msf were under construction. The strongest pockets of new construction were the Inland Empire area of California, the I-18/I-78 Corridor in Pennsylvania, Dallas and Chicago.
- At the start of the year, the pace of job growth has begun to ramp up. Over the last 12 months, the economy has added 2.0 million total jobs and 2.1 million private sector jobs. As of February, the U.S. had recovered 5.7 million or 66% of the 8.7 million jobs lost in the recession, bringing employment to its highest level in just over four years.
- Given the level of demand and general lack of new product, seaport cities and major logistics hubs will remain strong performers in 2013.
Source: Cushman & Wakefield Research. US Bureau of Labor Statistics. Only markets tracked by Cushman & Wakefield offices are included in this analysis.