A total of 282.4 million square feet of projects have started this year after 598 million square feet began construction in 2022. Furthermore, mindful spending became a main theme in 2023 and will likely continue in 2024. Despite inflation, holiday spending in 2023 outpaced the year before, and the annual growth of spending continues, but the rate of growth is slowing and returning to pre-pandemic levels, according to new data from ITS Logistics.
“Overall, starts have slowed as the year progressed and interest rates continued to rise,” says Ryan Martin, president of distribution and fulfillment for ITS Logistics. “The third quarter of 2023 saw 66.2 million square feet of starts after 93.1 million square feet broke ground in the second quarter and 100.6 million in the first quarter. In addition, consumer confidence ended the year on an optimistic note but is still far from where it was in 2019.”
Key takeaways:
- Despite the index showing growth, two-thirds of consumers surveyed still perceived that a recession is possible. During Q3 2023, e-commerce accounted for 14.9% of total sales, which accounted for a .9% increase from the previous quarter. Of that 14.9% of retail sales, major online retailers captured approximately 60% of the e-commerce market share.
“We’re finding that most employers aren’t reducing pay outright,” adds Martin. “In many cases, new employees are being offered lower salaries due to extreme pay growth over the past 2-3 years. This will likely be a short-term trend due to labor availability in certain markets. Costs remain high, and warehouse workers typically migrate into higher-paying industries if pay is not competitive. Ultimately, consumers continue to shop online and, if they’re voting with their dollars, we need to continue to prioritize the convenience of marketplaces like Amazon.”
