Job growth remains an important indicator of commercial real estate (CRE) demand, but it is becoming a less complete measure as productivity, artificial intelligence (AI), automation and capital-intensive investment play a larger role in economic growth, according to Ryan Severino, chief economist and head of U.S. research at BGO.
In the latest edition of BGO’s The Chief Economist, Severino noted that sectors such as advanced manufacturing and data centers can generate significant investment and property demand without creating comparable levels of permanent employment. Office demand also increasingly depends on factors beyond headcount, including workplace utilization, employee income and business models.
Severino said commercial real estate analysis will need to consider a broader range of indicators alongside employment as the relationship between economic growth and property demand becomes
