viding strong demand for the industrial sector. The
net exports figure was a positive $2.5 billion for the
Government spending declined 1. 7 percent,
driven by budget cuts at federal, state and local levels. At the federal level, both defense and nondefense
cuts added to a 2. 2 percent decrease in spending.
Still working through lower revenues, state and
local governments continued to slash spending
by 1. 3 percent.
On the employment front, despite a midyear
slump, the overall picture was positive—the economy recorded a net 2. 2 million new jobs, the strongest yearly growth in the past three years. Added
to the totals from 2010 and 2011, there have been
4. 9 million new jobs added post-recession. Given
the 8. 7 million jobs lost during the recession, it is
obvious that we still have a large gap remaining.
However, the trend is encouraging.
The forecast is for GDP growth of 2. 3 percent
in 2013 with another two million jobs added to the
economy. Though improving, the sub-par recovery
performance will keep the unemployment rate well
above 7.0 percent throughout this year.
SIOR Index Results
Building on an improving third quarter, office and
industrial properties concluded the year on a rising
note. The Commercial Real Estate Index, representing fourth quarter 2012 data, rose 5. 5 points. The
national index, based on 10 variables pertinent to the
performance of U.S. industrial and office markets,
closed at 81.1. The office sector gained 4. 6 points
to an index value of 75.1, in the wake of employment gains in business and professional services.
The industrial sector rose 6.0 points to a value of
85.6, reflecting increases in demand for warehouses.
Both sectors’ values were the highest since the
fourth quarter of 2007, indicating a post-recession
With modestly improving macroeconomic conditions, commercial markets across the country
notched noticeable growth. Geographically, all
four regions advanced, with the South posting the
highest nominal index value during the fourth quarter—86.7. Markets in the West and the Midwest
were virtually tied in terms of market performance.
Meanwhile, reeling from the effects of hurricane
sandy, the North lagged slightly behind the others.
In terms of quarterly growth, the West saw the strongest rate of improvement, gaining 8. 4 points.
As employment in office-centered industries
continued to rise, and demand for industrial spaces
remained strong, leasing activity increased in the
fourth quarter— 43 percent of respondents found
activity in line with or higher than historic levels.
Vacancy rates continued in a downward trend, with
2012 Payroll Employment Gains
-200 -100 0
Prof. & Business Svcs.
Ed. & Health Svcs.
Leisure & Hospitality
400 500 600
Source: Bureau of Labor Statistics
Source: SIOR, NAR
Percentage, Annual Rate
- 10.0 Sources: SIOR, BEA