Industrial Demand Forecast projects growth during 2013/2014.
Press Release Summary:
February 4, 2013 - According to NAIOP Industrial Space Demand Forecast, U.S. industrial market is poised for significant growth throughout 2013 and 2014. Respectively, annual net absorption in 2013 and 2014 is forecast to reach 150 million and 175 million ft² – 50% and 75% above net absorption figure of roughly 100 million ft² posted for 2012. Robust growth is attributed to reduced risk of double dip recession as well as improving GDP and job growth. Predictive model is funded by NAIOP Research Foundation.
Original Press Release
Net Absorption of Industrial Space Could Reach 150 Million Square Feet in 2013 NAIOP Releases Inaugural Eight-quarter/Two-year Industrial Demand Forecast
Press release date: January 28, 2013
Washington, D.C. – The U.S. industrial market is poised for significant growth throughout 2013 and 2014, with annual net absorption forecast to reach 150 million and 175 million square feet in 2013 and 2014 respectively, according to the NAIOP Industrial Space Demand Forecast. These levels are 50 and 75 percent above the net absorption figure posted for 2012 of roughly 100 million square feet, with robust growth attributed to reduced risk of a double dip recession and improving GDP and job growth.
“Industrial has heated up,” said Dr. Randy Anderson, University of Central Florida, one of the authors of the forecast. “The industrial segment will experience strong and continuous growth from the first through the fourth quarter of 2014 due to clarity post-election and post-fiscal cliff, easing in the credit markets, and improvement in both consumer and business confidence.”
The predictive model is funded by the NAIOP Research Foundation and was developed by Anderson and Dr. Hany Guirguis, Manhattan College. The forecast is based on a process that involved testing more than 40 economic and real estate variables that theoretically relate to demand for industrial space, including varying measures of employment, GDP, exports and imports, and air, rail and shipping data. Leading indicators that factor heavily into the model include the Federal Reserve Board’s Index of Manufacturing Output (IMO), the Purchasing Managers Index (PMI) from the Institute of Supply Management (ISM), and net absorption data from CBRE Econometric Advisors.
In 2010, the NAIOP Research Foundation awarded a research grant to Anderson and Guirguis to develop a model for forecasting net absorption of industrial space in the United States. A white paper describing the research and testing behind the model for NAIOP’s Industrial Space Demand Forecast is available on the NAIOP Research Foundation website: http://www.naiop.org/en/Research/Our-Research/Reports/Industrial-Space-Demand-Forecast.aspx
ISM, the Federal Reserve and CBRE Econometric Advisors assume no responsibility for the Forecast.
Absorption forecast tracks with CBRE data and may vary when compared with other data sets. Data includes warehouse, distribution, manufacturing, R&D and special purpose facilities with Rentable Building Area of 10,000 SF-plus.
About the NAIOP Research Foundation: The NAIOP Research Foundation was established in 2000 as a 501(c)(3) organization to support the work of individuals and organizations engaged in real estate development, investment and operations. The Foundation’s core purpose is to provide these individuals and organizations with the highest level of research information on how real properties, especially office, industrial, retail and mixed-use properties, impact and benefit communities throughout North America. For more information on how to contribute or for complimentary research reports, visit www.naioprf.org.
About NAIOP: NAIOP, the Commercial Real Estate Development Association, is the leading organization for developers, owners and related professionals in office, industrial, retail and mixed-use real estate. NAIOP comprises 15,000 members in North America. NAIOP advances responsible commercial real estate development and advocates for effective public policy. For more information, visit www.naiop.org.