Here is a summary of a press release from the National Association of Inustrial and Office Parks that has their outlook for 2013.
According to the NAIOP Industrial Space Demand Forecast they expect the U.S. industrial market is to experience 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,
These levels are 50 and 75 percent above the net absorption figure posted for 2012. This robust growth is 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.
Here in Clark County we’re still a little behind the national curve, but I believe this forecast to be correct in direction, but not to the same extent as nationally in 2013.