The commercial real estate industry is very aware of how strong the industrial sector is right now, mainly due to the development of major warehouse/distribution facilities by Amazon and other companies fulfilling the ever-growing consumer demand for e-commerce.
Now it looks like the manufacturing sector is flexing its muscles.
The Bureau of Labor Statistics’ (BLS) August job report was not all good news, but it did bode well for manufacturing employment, which has been playing catchup since the Great Recession.
But The New York Times recently reported that manufacturing positions were added in August at a faster pace than any month in the last four years. Factories are said to have lost more than two million jobs during the recession, but since 2010, one million more jobs have been added.
This obviously helps industrial commercial real estate investors and landlords have assets involved with manufacturing.
Another strong point in the jobs report was what took place in the construction industry, which is obviously crucial to the health of the commercial real estate, as well as the overall economy.
The BLS said that construction positions were upped by 28,000 during the month, though it was under the 36,000 that manufacturing produced. Still, an increase in construction jobs shows that there is movement in commercial real estate development, most likely in the continually booming industrial and multifamily arenas.
As long as we are on the topic of government statistics, it’s helpful to point out the Consumer Confidence Index for August, as reported by The Conference Board. The index, at 122.9, beat expectations for most analysts, and it was up 120.0 in July. As analyzed by the Conference Board, there was an increase in respondents polled who said that business conditions in the country will not improve, however less supposedly think that they will worsen.
This bodes well for the retail real estate industry, at least currently, and shows that consumers have money to spend. Unfortunately, the spike in gas prices as a result of Hurricane Harvey have likely given Americans pause on where their money is spent.
But gas prices are expected, by many analysts, to decrease, depending on the fate of Hurricane Irma, and the recent macro economic news impacting commercial real estate is good for both the industrial and retail sectors.
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GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.
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