Commercial/Industrial Sector Reports Growth for Third Consecutive Month

 

Courtesy of AIA

In addition, business conditions continue to improve at firms with a commercial/industrial specialization, despite persistent weakness in the general economy. Survey panelists report that the design phase for nearly half of their projects lasts for less than six months. The complexity of the project is the most important influence on the length of that design phase.

Firms with a commercial/industrial specialization reported growth for the third month in a row in July. While it remained minimal, it is still a positive sign. The highest score in nearly two years for that sector was reported at firms with an institutional specialization, amid reports that building projects funded under the stimulus program are beginning to wrap up.

The most recent issue of the Federal Reserve’s Beige Book reported that, for the most part, the commercial and industrial real estate market remains weak in all regions of the country. However, while vacancy rates in many areas are flat or increasing, office/retail leasing actually has been increasing in New York City.

Construction activity continues to weaken in the Atlanta, Minneapolis, Dallas, and Cleveland, but public infrastructure construction is on the rise in Chicago. Most Federal Reserve Board districts anticipate slow growth in commercial/industrial real estate in the near future.

Employment data continues to paint a mixed picture. While overall nonfarm payroll employment declined by 131,000 positions in July, the private sector continued to add jobs, with an additional 71,000 positions. Construction employment remained relatively flat, shedding just 11,000 jobs in July.

– Courtesy of AIA