The NAIOP recently released a report projecting 2015 will be the best year of the decade for commercial real estate development. Construction spending has increased, as stated in JLL's recent construction report, and NAIOP confirms this growth along with the US economy. This report further expands performance by industry:
The commercial real estate development industry in 2014 saw its best year since 2007, according to an annual report on the state of the industry released today by the NAIOP Research Foundation. The report, entitled “The Economic Impacts of Commercial Real Estate,” determined that the economic contributions yielded by the development process increased significantly by 40 percent over the previous year, the largest gain since the market began to recover in 2011. Direct expenditures for 2014 totaled $174.31 billion, up from $124 billion the year before, and resulted in the following economic contributions to the U.S. economy:
- Total contribution to U.S. GDP reached $528.09 billion, up from $376.35 billion in 2013.
- Personal earnings (or wages and salaries paid) totaled $168.42 billion, up from $120.02 billion in 2013.
- Jobs supported (a measure of both new and existing jobs) reached 3.94 million in 2014, up from 2.81 million the year before.
“The industry is strong today and making an even bigger contribution to our national economy, but it still has room to grow. Office and industrial were very strong and we believe the activity in these areas will keep accelerating. We hope Congress can agree on a bipartisan infrastructure investment package and continues to provide incentives for capital investment to keep the job creation going strong,” said Thomas J. Bisacquino, NAIOP president and CEO.
As Construction Spending Increases the U.S. Economy Grows
2015 projections show accelerating construction spending, with single-digit gains in fixed investment in commercial structures such as office, retail, health care and distribution facilities. As construction continue to grow between 2014 and 2015, the U.S. economy’s growth rate is projected to increase from 2.4 percent in 2014 to 3.0 percent in 2015 and continue its expansion at least through 2020, according to IHS data in the report.
Read the entire report here.