Warehousing space on upswing

By Staff -- Modern Materials Handling, 9/1/2005

After an extensive stagnation, demand for new warehouse and distribution space has increased noticeably.

The warehouse facilities market has been "flat to declining and inventories have risen every year since 2001," Rosalyn Wilson, consultant and report author, explains in a recent report analyzing the market. In 2004, however, the warehouse market "completely turned around, with more warehouses being built and far fewer vacancies." Her comments were made in the "16th Annual State of Logistics Report," which is available at www.cscmp.org.

Jim Haughey, director of economics for Reed Business Information, provides a somewhat more conservative view of the warehousing construction landscape. Construction spending for commercial warehouses was at an $11.5 billion annual rate in April and May, he says. This is up from the low point in this building cycle of $9.6 billion in April 2004 but well below the peak in the last building cycle of $15.8 billion in spring 2001.