Source: NAOIP Research Foundation, Washington, D.C.
The commercial real estate development industry grew at the strongest pace since the economic recovery began in 2011, according to “The Economic Impacts of Commercial Real Estate,” an annual state of the industry report.
Author Dr. Stephen S. Fuller, director of the George Mason University Center for Regional Analysis, finds the economic impact attributable to nonresidential development rose 24 percent over the previous year, the largest gain since the commercial building sector began to recover in 2011. Direct expenditures for 2013 totaled $124 billion, up from $100 billion the year before, and resulted in these contributions to the U.S. economy:
- Total impact on U.S. GDP reached $376.35 billion, up from $303.36 billion in 2012;
- Personal earnings (or wages and salaries paid) totaled $120billion, up from $97 billion in 2012; and,
- Jobs supported (a measure of both new and existing jobs) reached 2.81 million in 2013, up from 2.27 million the prior year.
For remainder of 2014 and into 2015, the report sees market figures continuing to rise, with year-over-year growth expected in the range of 8-15 percent. Commercial real estate development has an immense ripple effect in the economy, authors contend, providing wages and jobs that quickly roll over into increased consumer spending.
“Commercial development’s economic impact is tremendous; simply put, a healthy development industry is critical to a prosperous U.S. economy,” affirms NAIOP President Thomas Bisacquino. “As the uneven pace of the nation’s economic recovery continues, the industry seeks public policy certainty that bolsters investors’ and developers’ confidence. Despite this lack of assurance, we see positive indicators of a rebounding industry, but believe the industry could be more robust.”
The report is funded by the NAIOP Research Foundation. An executive summary and the full report are posted here.