Need more proof that the U.S. industrial market is still in boom mode? Just take a look at the September National Industrial Report from CommercialEdge.
According to the report, the country’s industrial sales volume hit $57.6 billion during the first eight months of this year. And in August, the industrial vacancy rate fell 30 basis points when compared to July, dropping to a low 4.1%.
One of the reasons for industrial’s current hot streak? CommercialEdge points to the reshoring. As the company’s report says, during the pandemic, U.S. manufacturers realized that making good abroad came with risks. Today, then, many businesses are reshoring the production of their goods to the United States. The semiconductor industry in particular is already beginning this process.
Congress and Pres. Biden this summer signed the CHIPS Act into law. This act allocates $53 billion in funding to support the domestic manufacturing of semiconductors. The government’s Inflation Reduction Act includes incentives to encourage companies to produce renewable energy products in the United States.
According to numbers from the Bureau of Labor Statistics, there are more workers in the U.S. manufacturing sector now than at any time since 2008. This sector’s employment growth has been higher than 3% year-over-year every month in 2022.
With the added boost of reshoring, then, it’s little surprise that the country’s industrial market continues to thrive. CommercialEdge reported that national in-place rents for industrial space averaged $6.64 a foot in August, a jump of four cents from July and an increase of 5.5% during the last 12 months.
Construction crews are racing to meet the demand for new industrial supply, with 703.5 million square feet of industrial space now under construction across the country, according to CommercialEdge. This pipeline of new construction continues to grow despite concerns over rising interest rates and inflation.