New Report: Economic Impacts of Commercial Real Estate, 2021 U.S. Edition

Originally published by the NAIOP Research Foundation on February 3, 2021.

The NAIOP Research Foundation has published its annual Economic Impacts of Commercial Real Estate, 2021 U.S. Edition.

Commercial real estate development and operation of existing buildings generated the following economic benefits in 2020:

  • Supported 8.0 million American jobs (a measure of both new and existing jobs).
  • Contributed $1.01 trillion to U.S. GDP.
  • Generated $338.1 billion in salaries and wages.

Key measures impacting economic growth in 2021 include:

  • Office construction expenditures totaled $38.9 billion in 2020, down 28.5% from 2019 after increasing 12.7% in 2019.
  • Retail construction expenditures totaled $11.7 billion in 2020, a decrease of 29.5% from 2019. This decrease marks the fifth straight year of decline; the last time retail construction spending increased was in 2015.
  • Warehouse construction outlays only decreased marginally in 2020, down 0.3% from 2019. In 2019, construction spending had been up sharply (up 27.4%), continuing a positive trajectory that began in 2011.

Industrial (manufacturing) construction spending was hard hit by the contraction in 2020, declining 29.5%. The manufacturing sector that had been negatively impacted by uncertainty in foreign markets due to tariff issues in 2019 was severely affected by the pandemic and subsequent shutdown of the global economy. This disrupted supply chains and undermined domestic and foreign consumer demand during the last three quarters of 2020.

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