C&W Industrial Research Fact of the Week

• Industrial production trends, which measures output for the industrial sector of the economy (including manufacturing, mining, and utilities) coincide with overall demand for industrial space in the United States. In 2009, the significant decline of 11.5% for industrial production sent the markets reeling, resulting in over 125 msf of negative absorption. Similarly, the increase in industrial production over the past eight quarters has led to overall net absorption of over 38.0 msf in the first half of the year, already surpassing the 13.0 msf that was absorbed in all of 2010.
  
• Given the weak unemployment report that showed a decline in factory jobs and a steady manufacturing workweek, industrial production only rose 0.2% in August, after a strong 0.9% gain in July. Although Moodys/economy.com is projecting the positive trend to continue through the remainder of 2011, one has to be cautious about expecting output gains to continue given the overall weakness in the economy. With the weakening economic sentiment, expect slower, but not negative, real estate demand.

Source: C&W Research Services, Moody’s Analytics. NOTE: Only markets tracked by Cushman & Wakefield offices are included in this analysis. Industrial production increase of 3.23% compared year to date totals June 2011 vs. June 2010