- New Jersey ended 2015 on a high note, capping a year of the strongest job growth in fifteen years; unemployment decreased to 5.1%, consumer spending strengthened at a 3% rate, and according to the Bureau of Economic Analysis, the GDP increased at an annual rate of 1%. Personal consumption expenditures (PCE), residential fixed investment and federal government spending contributed to the increase. Motor vehicles, food & beverages, and gasoline detracted the growth.
- The Federal Reserve raised interest rates 25 basis points – the first increase in nearly a decade. It displayed a vote of confidence in the economy despite the slower global demand with China, stronger dollar, and lower oil prices.
- According to the National Associations of Realtors, a lack of supply has caused home prices to accelerate. The national median single family home price grew nearly 7% at the end of the 4Q15.
- The majority of the office absorption was in Class B+ and A facilities due to the continued flight to quality interest. Despite the slow field, the market fundamentals continue to improve, assisting those markets’ asking rents to rise slightly.
- NJ saw strong private sector employment growth adding 64,500 jobs in 2015 according to the US Bureau of Labor Statistics, which is one of the strongest job growth in 15 years.
- Industries that recorded employment gains included professional and business services (+6,700), trade, transportation and utilities (+2,400), other services (+2,400), public sector (+800), education and health services (+1,800), construction (+700) and manufacturing (+200). Sectors that experienced contraction were information (-800), financial activities (-600) and leisure and hospitality (-300).
- The retail net absorption was moderate with a positive 635,816 SF – the market has seen an overall decrease in the vacancy rate to 5.2%, (Costar).
- Strong industrial demand continues to be driven by E-commerce, 3PL and food distribution, lowering the vacancy rate to 6.88%; while average rental rates increased to $6.10 PSF NNN.
- Facilities under construction total 3.7MSF – most are on speculative basis.
- Positive absorption of 3.1MSF – the majority is along the NJ Turnpike.
- Container traffic increased year-over-year 10.4%. Exports declined about 2 percent in 2014 and again in 2015 because of the strong dollar, which makes U.S. products and commodities more costly to the economically struggling trading partners such as China, Japan and most of the European nations.