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INDUSTRIAL SECTOR COOLS, MANUFACTURING HEATS UP Following record high demand and rent prices notched during the pandemic, the industrial sector’s dynamics are shifting and demand is cooling, finds a new U.S. industrial market update from Savills. Some predictions about where things are headed from here: • Vacancy rates are on the rise. While the market is still historically tight, vacancy rates are inching higher as occupiers take less space and sublease availability increases. • New construction slows. Construction activity is slowing in the sector, with new starts down 38% since this time in 2022. Given the interest rate uncertainty impacting the entire real estate industry and the danger of oversupply— particularly in Sun Belt markets—new development has started to halt. • Port volumes are down. Ports around the country are seeing lower container volumes, with the West Coast most impacted by the drops. • Manufacturing poised for growth. Despite economic headwinds, manufacturers remain poised for long- term growth due to the reshoring of production, especially electric vehicles. At the same time, e-commerce companies’ demand for new space will drop as growth in the sector slows. • Occupiers gain leverage. Market conditions should a¥ord tenants more options as well as leverage in negotiations. Savills expects to see rents continue to stabilize and more flexible deal terms, including landlord concessions, on the horizon.
What are the best and worst paid industries in America? To rank them, Lensa conducted a study that looks at average weekly earnings compared to the average weekly hour worked. The industry with the lowest average earnings is leisure and hospitality, in which employees only take home $506 every week ( see chart below ). This is just 25.9% of what workers in the utilities industry earn and less than half of the private sector average. INDUSTRIES WITH THE LOWEST AVERAGE SALARY PER HOURS WORKED
Average Weekly Hours Worked
Average Weekly Earnings
Average Salary per Hour Worked
Rank
Industry
1
Leisure and hospitality
26.1
$506
$19.40
2
Retail trade
31.3
$704
$22.50
Transportation and warehousing
3
38.1
$1,042
$27.36
4
Other services
32.3
$918
$28.42
5
Manufacturing
40.4
$1,226
$30.35
Education and health services
6
33.4
$1,036
$31.01
7
Private service-providing
33.7
$1,055
$31.31
8
Goods-producing
40.1
$1,271
$31.69
9
Construction
39.2
$1,318
$33.62
10
Wholesale trade
39.2
$1,349
$34.42
The industry with the second-lowest average earning is retail, in which workers work an average of 31.3 hours per week. Despite this, the average salary is just $704 per week. In third place is transportation and warehousing, in which employees take home $1,042 every week. The average hours worked per week in this industry is 38.1. The Lensa study also looks at the industries with the highest weekly earnings. Utilities is the industry with the highest average weekly earnings at $1,953, which is $861 higher than the private sector average of $1,092. Second on the list is the information industry, earning an average of $1,659 per week. Mining and logging is the industry that earns the third most per week, with an average salary of $1,601.
18 Inbound Logistics • June 2023
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