New Unemployment Claims Down, Industrial And Warehouse Property Demand To Rise
NAR Chief Economist Lawrence Yun blogged the latest Economic Update, wherein the research staff analyzed recently released economic indicators pertaining to unemployment and imports and exports.
For commercial practitioners, the news is encouraging, particularly in the international trade indicators. In March, imports and exports climbed. Compared to a year ago, imports rose 8.4% over last year, while exports hiked 7.3%.
Imports and exports are perceived as a leading indicator for leasing and purchasing demand in industrial and warehouse properties. The general idea being that you can’t service heightened demand for exports without more industrial and warehouse capacity. On the reverse side, meeting heightened demand for imports requires more access to warehouse space along major trade routes.
(Readers interested in ideas as to where these routes will grow might be interested in Sam Fisher’s talk on the future of Warehousing, where the head of industrial practice at Jones Lang LaSalle addressed the NAR Commercial audience at the 2011 convention.)
Lawrence Yun goes on to describe the role of international trade in broad terms applicable to CRE:
- Though the widening trade deficit will hold back current economic growth by a few decimal points, the broad increases in international trade is critical to a long-term rise in standard of living. Extra international competition always forces companies to shape up and drive towards efficiency while consumers are exposed to better products.
- The falling international trade in 2008 and 2009 were due to the harsh economic recession, when the U.S. economy lost 8 million jobs and the number of people filing for unemployment checks skyrocketed. The Great Depression of the 1930s was also associated with a major collapse in international trade. Many European countries after the First World War sunk into terrible economic hardship as many newly created small-sized countries started to impose foreign tariffs (say between Croatia and Austria) which previously had not existed as part of the Austrian-Hungarian Empire. The disintegration of Soviet Union and its equivalent of the Great Depression in the 1990s was also associated the sudden collapse in border trade, say between Ukraine and Russia. In a more recent example, North Korea today is one of the poorest countries in the world because it believes principally in domestic production without foreign competition.
- China’s industrial production rises/France and Greek industrial production fall badly/Greek unemployment rises to 21.7%/ (sgtreport.com)
- Business insurance holders ‘have boosted the export market’ (premierlinedirect.co.uk)
- Warehouse: Ensuring Efficiency with The Production Process (athingforcars.com)