Development, construction and ongoing operations of new commercial real estate in the United States – office, industrial, warehouse and retail – supported 6.25 million American jobs and contributed $861 billion to U.S. GDP in 2016, according to the report, “Economic Impacts of Commercial Real Estate,” published by the NAIOP Research Foundation.
To come up with U.S. statistics, researchers measured GDP, salaries and wages, and jobs created and supported from the development and operations of commercial real estate.
- Commercial real estate development, construction and ongoing operations supported 6.25 million American jobs in 2016 (a measure of both new and existing jobs).
- Commercial real estate development, construction and ongoing operations contributed $861 billion to U.S. GDP in 2016.
- There were 410 million square feet of office, retail, warehouse and industrial built in 2016, with capacity to house more than 1 million new workers with a total estimated payroll of $57.6 billion.
“The importance of commercial development to the U.S. economy is well established, and the industry’s growth is critical to creating new jobs, improving infrastructure, and creating places to work, shop and play,” says Thomas Bisacquino, NAIOP president and CEO.
Construction spending has increased each year since 2011, gaining 48.7 percent between 2011 and October 2016. For the year ending in October 2016, total construction spending was up 3.4 percent, exceeding the GDP growth rate for this period.
- Office construction expenditures totaled $36.6 billion in 2016, increasing by 28.7 percent year-to-year
- Retail construction expenditures totaled $17.2 billion in 2016, a decrease of 7 percent year-to-year after gains of 8.2 percent in 2015.
- Warehouse construction totaled $13.6 billion in 2016 gaining 12.7 percent year-to-year – the sixth consecutive year of increased expenditures
- Industrial construction spending decreased sharply for a second year in 2016 to $15.5 billion, down 29.9 percent year-to-year. NAIOP attributes the drop to a pullback in industrial/manufacturing construction for the past two years to a downturn in the energy sector and a weaker global demand for U.S. manufactured goods due largely to unfavorable exchange rates
The report notes that if the economy avoids recession through mid-2020, it would tie the previous longest business cycle record of 10 years, achieved in the 1980s.
Top 10 states by construction value in 2016
- New York: $24.805 (direct spending, billions), $46.058 (total output, billions), 284,135 (jobs supported)
- Texas: $18.504, $44.399, 310,994
- California: $14.340, $30.792, 211,341
- Louisiana: $9.966, $19.724, 146,085
- Florida: $7.598, $15.752, 134,152
- Georgia: $5.720, $13.188, 103,519
- Michigan: $5.721, $12.143, 97,830
- Illinois: $4.916, $11.340, 75,881
- Pennsylvania: $4.080, $9.123, 60,298
- Massachusetts: $4.603, $8.883, 55,435
© 2017 Florida Realtors
Florida ranks fifth nationwide for commercial development, according to NAIOP, a commercial real estate development association. By sector, it’s third in retail, third in warehouse/flex sectors and seventh in office space.