April 23, 2010
By Allison Landa, News Editor
The pieces of a sustainable recovery are just beginning to come together, but they’re not yet forming a completed puzzle. That’s according to Jones Lang LaSalle, whose Spring Economic Outlook finds that economic output grew at a robust level last quarter, but the change in private inventories – a major growth driver – is not sustainable long term.
However, JLL also found that despite a limited recovery in the labor market to date, the pieces have fallen into place for hiring to increase during the second quarter. Employment gains in March, the report says, were an initial step toward recovering the 8.4 million jobs that evaporated during the recession.
“Economic stabilization and recovery remained on track during the first quarter of 2010, although the pace of recovery has been somewhat lackluster in several major indicators – most notably the labor market,” the report reads. “Given the depth and duration of the recession, it will take years to recover the previous peak in employment.”
Echoing what the majority of experts have said, JLL reports that the commercial real estate industry lags the overall economy and will remain challenged throughout this year.
“Recovering indicators in the real economy certainly provide positive steps toward the stabilization and eventual recovery of commercial real estate fundamentals,” the report reads. “However, fundamentals will continue to remain challenged throughout 2010 and it will take time for them to strengthen.”
The key to stabilization, the report claims, is a strengthening in the labor market. With employment growth having tentatively resumed during the first quarter, JLL says a long road to recovery is afoot.
“However, the pace of recovery to date has been weaker than most would have preferred,” the report reads. “The reality is that the magnitude of job losses recorded during the recession will take several years to recover.”