Availability of industrial space in the U.S. declined in the first quarter of 2016 to the lowest level since 2001 and rents remain on an upward trajectory, though new construction is poised to limit both trends over the next two years, according to CBRE Group, Inc.
Analyst Insight: The demand for increased efficiency in China distribution is driving some incremental improvements in supply chain. Growth is on the rise for domestic transportation, localized supply chain IT solutions are experiencing revenue growth, and the amount of automation installed in new facilities is on the rise. Changes are also happening in real estate and there is an increase amongst importing and exporting. - Jim Serstad, Managing Director Asia, Tompkins International
Though the U.S. logistics industry has recovered unexpectedly well from the last recession, reaching record highs in occupancy and absorption, experts believe the growth in property rents and values will peak sometime this year.
Emerging markets have driven growth for many multinational corporations (MNCs) for years, and they will continue to do so. But these are turbulent times as commodity prices plunge, currencies are devalued, and equity markets gyrate. The profitability of many MNCs' operations is already under attack, and future performance will be challenged by slower macroeconomic growth, increasing costs, and heightened competition from local companies, which are rapidly gaining scale, experience, and capability. To reduce these pressures, companies will have to focus much more on improving their competitiveness through constant productivity gains.
In December, two conflicting reports were released, one by A.T. Kearney and one by the Boston Consulting Group. The A.T. Kearney report states that reshoring may be "over before it began," and the Boston Consulting Group report states that it is increasing. Why the difference in opinion and who is right?
Industrial and supply chain real estate occupiers and investors alike experienced a record-breaking year in 2015 and should expect this trend to continue well into 2016, according to a JLL logistics survey report. Strong demand for logistics facilities is expected to remain consistent globally during 2016. Rental growth is projected to continue across all markets of the world in 2016 and through 2017.
When the Panama Canal expansion finally debuts in Spring of 2016, it will open to a thriving market that remains hungry for new and efficient distribution center space in nearly every major U.S. market. Retailers and e-commerce companies are already investing in new and larger distribution and fulfillment centers as the U.S. supply chain evolves to meet changing consumer demand and service requirements; especially near key ports, transshipment points and large population centers.
Innovation of the Year: Automating the assembly of pallets that incorporate cases of multiple dimensions leads to big savings in labor costs, a safer work environment, a streamlined D.C. operation, and better service to retail outlets.
Innovator of the Year: The Liquor Control Board of Ontario; Runner-Up: Lennox Residential; Finalists: Hewlett-Packard, U.S. Marine Corps, Shared Support Services of Southeastern Ontario
Of manufacturers planning to add production capacity over the next five years for goods consumed in the U.S., more plan to add that capacity in the U.S. than in any other country - a sharp reversal since as recently as two years ago. And a rising percentage of U.S.-based executives at the manufacturers say they are already in the process of reshoring production work from China. These are among the findings of new research released today by The Boston Consulting Group.
Given the vicissitudes of the world's textile and apparel supply chain, China is changing its strategy to counter what Chinese experts describe as the "new normal." That has direct impact on textiles in the United States.