Professional Report - Q2 2013 Summer

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construction recorded noticeable growth. The unemployment rate declined from 7. 6 percent to 7. 5 percent in March.

Businesses have also increased investments in equipment and jobs. Business spending gained 2. 1 percent in the first quarter of the year, focused on capital, equipment and software. With international trade remaining favorable, and adding the increased domestic oil production, which led to diminishing need to import it, the balance of trade narrowed in the first quarter from $43.6 billion to $38.8 billion.

Government spending continued its decline, shrinking 5.0 percent in the first quarter, driven by budget cuts at federal, state and local levels. At the federal level, both defense and nondefense cuts added to a 8. 7 percent decrease in spending. State and local governments slashed spending by 2. 4 percent. Though negative to the economy over the short term, lowering the federal budget deficit will likely help long-term economic prospects.

The outlook for the remainder of 2013 is for GDP to grow at a 2.0 percent annual rate. Payroll employment is expected to rise 1. 5 percent, as the unemployment rate remains around 7. 5 percent.

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Cars Midsize Small Luxury Large Light-duty trucks Pickup Cross-over Minivan Midsize SUV Large SUV Small SUV Luxury SUV

Vehicle Sales April 2013 (% Chg Yo Y)

- 60

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10

20

30

Source: www.motorintelligence.com

SIOR Index

Northeast
Midwest
South
West

SIOR Index Results

Office and industrial properties notched a slight rise in market conditions during the first quarter of the year. The Commercial Real Estate Index, representing first quarter 2013 data, rose 0.6 points. The national index, based on 10 variables pertinent to the performance of U.S. industrial and office markets, closed at 81.7. The office sector gained 1.0 point to an index value of 76.1, in the wake of employment gains in business and professional services. The industrial sector rose 0.3 points to a value of 85.9, as demand for warehouses continues to grow. Both sectors continue their march towards normalization, with index values at the highest since the fourth quarter of 2007.

With steady macroeconomic conditions, commercial markets across the country notched noticeable growth. However, during the quarter, growth was spread unevenly. The South retained its top spot in absolute index values, and also in quarterly growth, advancing 4. 4 points. The Northeast was second in terms of growth—rising 0.4 points— and ranking. Markets in the Midwest and West lost ground during the period, decreasing by 7. 3 points and 4. 6 points, respectively.

Market trends were positive across most indicators. Leasing activity improved in the first quarter— 46 percent of respondents found activity in line with or higher than historic levels. Vacancy rates continued declining, with 89 percent of SIORs pointing to vacancies which are the same or lower than a year ago. Concessions remained the norm