The commercial real estate industry continues to be a powerful contributor to the United States economy, supporting approximately 3.2 million American jobs, and adding $450 billion to the U.S. GDP in 2015. There were an additional 429.4 million square feet of commercial real estate built in 2015, providing new work for 1.1 million people.
A report by the NAIOP Research Foundation (naiop.org) forecasts an acceleration in construction spending in 2016 with gains in fixed investment in commercial structures, such as office, retail, health care and distribution facilities. The author of the report, economist Stephen Fuller, Ph.D, of the Center for Regional Analysis at George Mason University, stated, “with the direct and indirect impact of construction spending on the U.S. economy (GDP) in 2015 totaling $3.2 trillion and accounting for 17.8 percent of GDP, the continuing growth of construction spending that began in 2011 will provide continuing support to the economy’s growth rate during the next several years. That is, the growth rate for construction spending will exceed the GDP growth rate annually for at least the next five years.”
The report shows that the $450 billion contribution to the nation’s GDP in 2015 is down slightly from 2014, due to a decline in energy prices that deterred construction of new energy facilities.
The report also showed that:
- Office construction expenditures increased by 3.0 percent in 2015, an increase of 29.8 percent from 2014.
- Retail construction expenditures were strong in 2015, up 8.2 percent from 2014.
- Warehouse construction supported a fifth consecutive year in expenditure growth, gaining 10.8 percent in 2015.
- Industrial construction spending decreased sharply in 2015, after a strong gain in 2014, when it was up 74.2 percent. The decrease was attributed to a downturn in the energy sector and a slowdown in global demand for U.S. manufactured goods.
South Carolina supported new construction according to the industry report, and ranked number ten in the nation for office construction. The construction industry contributed $1.285 billion to the state’s economy in the development of office space, and provided 23,052 new jobs to support this work.
Source: NAIOP Research Foundation, “Economic Impacts of Commercial Real Estate, 2016 Edition, by Stephen S. Fuller, Ph.D
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