• Manufacturer’s shipments increased at a 4. 8 percent
annual rate during the quarter, absorbing inventories of
• The Institute for Supply Management’s Composite
Index of manufacturing and nonmanufacturing activity
rose at a 23. 3 percent annual rate, reaching a value
of 58. 8 in the third quarter (values above 50 denote
With growing business confidence, employment trends
followed suit. Payroll employment remained on a positive
trajectory during the third quarter, adding a total of 702,000
net new jobs. The unemployment rate declined from 6. 2
percent in the second quarter 2014 to 6. 1 percent in the third
quarter. The labor force participation rate stayed at 62. 8
percent, the same level for the past two quarters. Employee
compensation—adjusted for inflation—increased at a 1.0
percent annual rate during the third quarter. Consumer
confidence rose in tandem with the economic gains during
SIOR INDEX RESULTS
Office and industrial markets continued on an upward
trajectory in the third quarter, as the economy provided
fuel for expansion. The SIOR Commercial Real Estate
Index, representing third quarter 2014 data, gained 4. 1
points. The national index, based on 10 variables pertinent
to the performance of U.S. industrial and office markets,
closed at 112.4, the highest value since the second quarter
of 2007. An index value of 100 shows a balanced market,
meaning that the national index has surpassed its historical
average, and is pointing to growing conditions.
Although employment trends moved upward, demand
for office spaces moderated. The office index rose 1. 1
points, to a value of 100.6. It was the first time that the
office index crossed the 100-point threshold since the
third quarter of 2007. The industrial sector maintained its
momentum, with the index rising 5. 4 points, to a value of
118.8. The industrial index has been over the 100-point
value for the past four quarters.
SIOR members reported solidifying fundamentals, with
positive developments in leasing and sales.
• Leasing activity exceeded historical levels for almost
half of SIORs who responded to a market survey.
• Rents continued rising for office and industrial
properties—only 4 percent of SIORs considered
that asking rents were below those of one year ago.
Meanwhile, 96 percent ascertained that rents were in
line with or above long-term averages.
Change in Payroll Employment: 2014.Q2
Yo Y, SA