Following the poor hiring results in March, the U.S. labor market righted itself with solid additions to payrolls in April. U.S. employers added 223,000 jobs last month, including 45,000 construction jobs. Developers were able to begin several projects, which increased the pace of multifamily development and office, retail, and lodging building. Overall, the unemployment rate is at its lowest level in nearly eight years.
Promising signs point to the acceleration of economic growth throughout the remainder of 2015, encouraging the Federal Reserve to raise its benchmark lending rate. Low interest rates and subdued inflation have also helped to support consumer spending power.
In turn, an increase in credit card debt suggests that consumers may be spending more. The retail sector continues to perform well, and even with 47 million square feet newly completed, it will not be enough to meet retailer needs.
These factors specifically impact the commercial real estate industry as there should be an upswing in development finally forming. Approximately half of the construction will take place in 10 key metros.