Supporting 41 million jobs nationwide in 2014, trade is a vital part of the U.S. economy. In the latest TREC Webinar, Robert Kramp, director of research & analysis for CBRE’s Texas and Oklahoma region, discussed how industrial and logistics real estate benefit from trade related companies occupying space in Texas and how international trade flows directly impact the demand for industrial and logistics real estate in Texas markets.
Here’s what we learned:
- Trade is increasingly becoming a force behind GDP worldwide
- The U.S. and Mexico trade $1.5 billion in goods and $148 million in services every single day.
- Texas’ competitive edge is in large part thanks to the state’s diversity of assets including industries from energy to technology, talent and logistical infrastructure across several major metropolitan areas.
- Texas is also a major gateway for trade thanks to its unique geographic location. For instance, Texas handles nearly 70 percent of trucks crossing from Mexico through land ports.
But here’s the bottom line:
The economic relationship between the U.S. and Mexico has evolved beyond contemporary discussion over “competitive wages.” Mexico’s industrial and logistical infrastructure has quickly become institutionalized as the neighboring economies have developed complementary economic linkages.
- Expanding labor demographics and significant productivity gains, along with the country’s physical proximity to the U.S., have positioned Mexico as both a high-skilled supplier and more than ever as a consumer.
- Mexico is the second last origin of imports into the U.S. and also the second largest destination of U.S. exports, many of which originate from, or travel to, regions far deep into the U.S.
- Any interruption of U.S./Mexico international trade could directly affect as much as 3.5 percent of total U.S. employment, as well as disrupt a significant driver of the U.S. GDP via exports. More specific to commercial real estate, an interruption in trade between these two countries could also weaken occupancy and demand for more than 390 million square feet or 26 percent, of net occupied commercial industrial space in Texas alone.
If you missed it, here’s the webinar recording: