Indiana ranked ninth in the economic impact of commercial development and fifth in the economic impact of industrial development, according to a new study.
The National Association for Industrial and Office Parks, or NAIOP, Research Foundation found commercial real estate contributed $29.2 billion to Indiana's gross domestic product last year. Commercial development contributed $12.8 billion in direct spending and $10.8 billion in personal spending to the Hoosier State.
Industrial development accounted for $9.31 billion in direct spending, $21.18 billion in economic output and $7.85 billion in personal spending last year, according to the NAIOP Research Foundation study. It supported an estimated 135,808 jobs.
Nationally, commercial development contributed $2.5 trillion to the U.S. gross domestic product, $913.1 billion in direct expenditure and $881.4 billion in personal earnings. The Virginia-based trade association estimates the industry supported 15 million jobs last year.
“Overall, commercial real estate continues to be a vibrant and important contributor to the nation’s economy,” said Marc Selvitelli, president and CEO of NAIOP. “We are seeing some adjustment in construction activity, notably in the industrial sector, whose growth had been on a record-setting trend following changes to the retailing paradigm driven by the pandemic and other economic forces. We are bullish that as those forces settle out, commercial real estate will expand in 2024.”
Construction spending grew by 5.6% last year. It accounted for 20.6% of total GDP when the multiplier effect was factored in, according to the NAIOP Research Foundation.
Non-residential construction values few 21.9% year-to-date last October.
Office construction grew 5.4% to $56.3 billion last year and has averaged $49.8 billion over the last five years, according to the NAIOP Research Foundation. Industrial manufacturing fell 22.1% to $79.5 billion last year. It has averaged $52.8 billion in expenditures over the past five years.
Warehouse construction spending average $45.4 billion over the last five years and totaled $51.8 billion in 2023, a 14% decline. Retail construction has averaged $16.6 billion over the last five years and dipped by 0.7% to $19.3 billion last year.
The construction industry employed 7.96 million people last year, adding more than 709,000 jobs over the past three years. It added 218,000 jobs last year, a 2.8% increase that was faster than the job market as a whole.
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