The NAIOP Research Foundation has released its Industrial Space Demand Forecast, the sixth forecast from a model that analyzes important economic factors and net absorption data to predict future demand for industrial real estate.
According to the data:
- The current annualized rate of growth (1Q2012) came in at 1.11 percent, which is in line with the 1.01 percent forecast. This rate is consistent with the readings during the past several quarters, which have ranged from .87-1.26 percent.
- 1Q2012 growth was within normal range of 1-2 percent per year. The finding continues to be consistent with readings of the overall economy, which has seen GDP growth that is still positive but below long-term averages. Nevertheless, 1Q2012 marks the seventh consecutive quarter of positive growth in industrial demand, following seven prior quarters of deep contractions.
- Strong demand growth isn’t expected until later in 2012, contingent upon the overall economy resuming more normalized growth and other risks, such as the continued issues in Europe.
- Therefore, demand for industrial space is expected grow at an annualized rate of 1.14 percent in 2Q2012, which is at the low end of the normal range. Increasing rates of growth are expected to begin to occur by the second or third quarter of 2012, barring exogenous shocks.