The NAIOP Research Foundation’s annual study “Economic Impacts of Commercial Real Estate” (www.naiop.org) measured the industry’s contributions to the Gross Domestic Product (GDP), salaries and wages earned, and jobs created from commercial real estate development. The annual study showed:
- Commercial real estate development, construction and operations created and supported 6.25 million jobs in 2016 (both new and existing jobs).
- Development, construction and ongoing operations contributed $861 million to the U.S. GDP in 2016.
- 410 million square feet of office, retail, warehouse and industrial were built in 2016, with the ability to house more than 1 million new workers, with a total of $57.6 billion estimated payroll.
Construction Spending Continues Expansion
One of the main factors for the economy’s growth last year was because of the continued growth in the construction industry. Construction spending increased by 48.7 percent between 2011 and 2016, and exceeded GDP growth in 2016 with an increase of 3.4 percent.
- Office construction spending increased by 28.7 from 2015, with a total of $36.6 billion in expenditures in 2016.
- Retail construction spending decreased by 7 percent from gains of 8.2 percent in 2015 for a total of $17.2 billion in expenditures in 2016.
- Warehouse construction expenditures totaled $13.6 billion in 2016, and increased spending for the sixth consecutive year, with a gain of 12.7 percent from 2015.
- Industrial construction spending decreased dramatically for the second year in a row t0 $15.5 billion, and declined by 29.9 percent from 2015. This was largely due to a downturn in the energy sector and weakening global demand for U.S. manufactured goods due to unfavorable exchange rates with U.S. trading partners.
Top Ten States Generating Construction Spending
The following states ranked among the top ten by construction value for office, industrial, warehouse, and retail combined.
- New York ($24.805 billion in direct spending, and 284,135 jobs supported)
- Texas ( $18,504 billion in direct spending, and 30,994 jobs supported)
- California ($14,340 billion in direct spending and 211,341 jobs supported)
- Louisiana ($9,966 billion in direct spending and 146,085 jobs supported)
- Florida ( $7,598 billion in direct spending and 134,152 jobs supported)
- Georgia ( $5,720 billion in direct spending and 103,519 jobs supported)
- Michigan ($5,721 billion in direct spending and 97,830 jobs supported)
- Illinois ($4,916 billion in direct spending and 75,881 jobs supported)
- Pennsylvania ($4,080 billion in direct spending and 60,298 jobs supported)
- Massachusetts (($4,693 billion in direct spending and 55,435 jobs supported)
South Carolina generated $1,938 billion in direct spending and supported 34,740 jobs in 2016.
Source: NAIOP Research Foundation, “Economic Impacts of Commercial Real Estate,” 2017 Edition, Stephen S. Fuller, PhD
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