Economic Update

Commercial real estate is inextricably tied to economic factors, both local and beyond. Locally, it is clear things are still booming: the Raleigh-Durham area has been abuzz with news of Amazon and Apple potentially locating new offices here; a quick survey of local business journals and newspapers shows company after company bringing jobs to the area; awards for economic growth and innovation abound; and the crowds of people moving into the area have yet to subside.

Screen Shot 2018-08-05 at 3.00.47 PMTake a step further out, and there’s ample proof that our state as a whole is continuing to thrive. For just one example, the Economic Development Partnership of North Carolina (EDPNC), a nonprofit public-private partnership operating under contract with the NC Department of Commerce, reported on May 11, 2018 that North Carolina had been awarded the 2018 Prosperity Cup award for the third year in a row. EDPNC’s CEO, Christopher Chung, is quoted in the article as saying: “The fundamentals that have been drawing companies for a long time really haven’t changed much. These include a great quality of life, well-renowned educational institutions and population growth with a lot of people coming out of school or mid-career who are moving here with a job or in search of one, all of which deepens the talent pool.”

With the local and state economic booms still proliferating, we next look to the national arena, which we have been tracking and discussing for several months now in this blog. Since our last posting, the second quarter and June financial reports have been published. The highlights:

The US economy gained 213,000 jobs in June (multiple sources, mid-July 2018);
Unemployment claims dropped to 208,000 during the week ending July 14th, the lowest number since December 1969 (Fox News, 8/2/18);
The unemployment rate increased 0.2% to 4% in June, a small increase attributed to a “surge” of 600,000 previously non-job-seekers reentering the job market, reportedly to take advantage of economic growth (The Kiplinger Letter, 7/6/18; Hutchinson Family Offices, 7/16/18);
The Fed released its second .25% interest rate hike in June, as expected and previously discussed, and projected the expectation that it would raise rates twice more by the end of 2018, most likely in September and December (multiple sources, July 2018);
Stock market numbers were mixed at the end of the second quarter, with the Dow down 1.8% between January and June, the S&P 500 up 1.7% and the NASDAQ added 8.8% (Hutchinson Family Offices, 7/16/18).
The nation’s GDP for the second quarter grew by 4.1% (multiple sources, 7/27/18 – 8/1/18)
Wages and Salaries grew 2.8% over the previous 12-month period (Bureau of Labor Statistics, 8/1/18)
The effects of both enacted and potential tariffs are creating quite a bit of chatter, but conclusions are mixed and possibly premature at this time; still, they are being carefully monitored by nearly every political and financial source imaginable.

Taking everything into consideration, whether a company is relocating to the area from another part of the state or nation, expanding a current local company, moving from one part of the Triangle to another, or simply investing in the future through commercial real estate, it is clearly still a very good time for commercial real estate growth in the Raleigh-Durham area!

If you’re looking to move here to the Triangle, or are already here and looking to expand your reach with additional office, retail or other commercial space, we’d love the opportunity to help you. Please contact our experienced and knowledgeable team. You can call us directly at 919-336-1700. We look forward to hearing about you and your company, and learning about how we can help you!

We look forward to working with you!