CPE 100 Quarterly Sentiment Survey: Job Market Growth to Boost Demand for Space in 2014
- Apr 30, 2014
In a sign of growing confidence about the economy, real estate executives expect a brightening jobs picture to expand the demand for space this year, according to the latest CPE 100 Quarterly Sentiment Survey.
Half of respondents believe that companies will seek more space to expand departments or to grow in specific markets this year. Another 36 percent expect that end users will maintain the status quo in their use of space. Only 14 percent say that companies will return space to the market or shut down excess facilities. Survey results are based on the first-quarter survey of the CPE 100, an invited group of industry leaders.
The upbeat response came even though real estate executives think that the job market has several years of recovery ahead. Only 7 percent of those surveyed believe that the job market will fully recover this year. A pessimistic 14 percent agree that the job market will “never” recover. About one third of the CPE 100 expect the office sector to benefit most from the improving job market, with industrial, retail and multi-family properties winning about an equal number of votes.
Optimism about the job market may be triggering broader confidence. Predictions about the prospects for the industry itself have fluctuated over the past several years, but executives are inaugurating 2014 with a measure of confidence. Nearly two thirds say that the industry will be performing somewhat better in three months. By contrast, only 41 percent expected that degree of improvement during the first quarter of 2013.
CPE 100 member are also more confident about the outlook for their own companies. The percentage of respondents who say that their businesses will be performing “somewhat better” in three months was 64 percent during the first quarter. That result matches the highest score for the category since the Sentiment Survey’s launch in 2012. One year ago at this time, 58 percent of the CPE 100 predicted that their businesses would be performing “somewhat better” in three months.
The biggest change in executives’ views is in the outlook for the broader economy. Sixty-four percent of the CPE 100 say that general business conditions will be somewhat better three months from now. As recently as the end of last year, just 43 percent offered such an upbeat outlook. It was also the most favorable view of the economy since the fourth quarter of 2012.