Construction in commercial real estate is booming and employment in construction and extraction occupations increased by almost 5,000 people between 2015 and 2016, a growth rate of 11.2 percent. With unemployment falling to historically low levels, currently 4.2 percent, the demand for workers is outpacing supply and construction costs increased significantly in 2016.
Demand from e-commerce retailers has reached fever pitch in Portland. Just 2 years ago, only 0.8% of industrial net absorption was attributed to e-commerce users and in 2017 that figure is expected to rise to 11.5%. But this number pales in comparison to what the region will see in 2018. 4 new requirements totaling almost 3 million square feet will take e-commerce’s share of net absorption to 51.8 percent.
Not only is demand increasing from e-commerce retailers but so is warehouse size. 3 new developments delivering in 2018 will crack the region’s Top-10 largest industrial buildings list, with the largest being over 1 million square feet. If we maintain our 5-year average net absorption, together with e-commerce, Portland will realize over 5 million square feet of net absorption, a figure not seen since 2000.
Portland has been ranked #1 by Forbes in its annual analysis of Best Places for Business and Careers 2017. Portland’s outdoor scene, progressive politics and environmental friendliness is fueling a migration of young talent to the city.
The region boasts the 9th highest concentration of highly educated millennials. Household incomes are up 4% annually since 2011 and unemployment has fallen below 4% from its peak in 2009. The current median home price in Portland is $409,000, 70% lower than the 3rd place winner Seattle, whose current median home price is $695,600. 7.2% of all the jobs in Portland fall within the well-paid STEM fields (science, technology, engineering, and math), compared to the national average of 5.8%.
Since the recession’s trough employment of 970,400 in November of 2009, the metro area has grown by an increase of more than 207,000 jobs. Employment in the Portland metro area has hit an all-time high for the region as of September 2017, now sitting at 1,178,000.
Portland’s current employment has surpassed the previous peak by more than 125,000 jobs, up 12% from April 2008. Talent shortages may become an issue for the region and inbound migration could be the key to continued economic growth.
Employment in industrial sectors is pushing employment growth in Portland. It now contributes more than two and half times that of office employment to total year-over-year job growth in the metro area. Portland’s largest employment sector is still the Trade, Transport & Utilities sector, but the majority of employment gains is coming from the construction sector, which added 8,500 new jobs year-over-year in August.
While national employment gains are more or less evenly distributed between office and industrial sectors, office-using growth dropped off in September as monthly Professional & Business Services gains more than halved to 13,000.