TAG Industrial Watch: October 15, 2022
The state of the American consumer is becoming bleaker by the month, and given the resounding impacts, industrial landlords should take notice. September’s 8.2% reading on the Consumer Price Index means that real wages on an annual basis have dropped for 18 straight months, sitting 3.3% lower compared to last year (BLS). Despite consumers cutting back on savings and racking up credit card debt (both at historical rates) in order to keep pace with the cost of living, retail sales continue to struggle.
Consequently, retailers are spending less time restocking their shelves. According to the latest data from WarehouseQuote, outbound orders via third-party logistics companies to retailers have dropped by 33% year-over-year (CNBC). With consumer demand tumbling, retailers have significantly slowed down overseas factory orders. Ocean freight orders have dropped by 20% alone going into the months of September and October (LogisticsInsider.in). The impact of this has sent prices on shipping containers crashing to the tune of 76% over the last six months based on one index (American Shipper).
Since the pandemic, it was the boom in consumer demand that ignited the shipping industry and took warehouse demand to new heights. However, as the American consumer continues to suffocate under the weight of inflation, despite the Federal Reserve’s belated efforts, the boom has evolved into a bust. While the industrial real estate market has remained resilient, investors and owner-users considering a sale may not have a better opportunity for the foreseeable future than today’s market.
I N D U S T R I A L N E W S
Ocean Shipping Order Drops By 20%, Signal A Drop In Consumer Demand
Big Decline In Warehouse Shipments Is Latest Sign Of The Consumer Pullback
Fall In Container Spot Rates ‘Much Steeper,’ ‘Less Orderly’ Than Expected
This CRE Analyst Says The Fed Is Oversteering
Consumer Prices Jump Again And CPI Shows Little Relief From High Inflation
R E G I O N A L N E W S
Port Of Houston Mulls Dwell Measures To Cope With Record-Breaking Volumes
Chicago Joins A Growing List Of Multilevel Warehouse Markets
Chevron To Expand Pasadena Refinery
McWhinney Breaks Ground On Precision Industrial At Centerra
Kansas City Fed Says Cannabis Has Boosted Economic