Despite COVID-19, Utah’s industrial economy remains strong
I am an industrial commercial real estate broker—a person that lives and works in the world of information as a resource, so I often rationalize the world in what I can draw from data. One thing I know to a moral certainty is that despite which generation they belong to, Americans consume.Domestic consumer spending accounts for 68.4 percent of our annual GDP and since 1990, the relationship of consumer spending to US GDP tells me this trend only accelerates with time.
The means and modalities of delivery to the consumer are different today since the mainstream adoption of e-commerce by consumers. The world’s direct to consumer model (“D2C”) is one that seeks and finds alpha in the elimination of inefficiency in supply chain.
We are living in a period of tremendous political and social tumult, that has only been exacerbated by COVID-19. Systemic weakness in current supply chain methodology has caused America’s entrepreneurs, small businesses, and corporations to rethink years of “lean” supply chain models.
Add repetitive natural disasters such as hurricanes and wildfires near the largest population centers and you have a recipe for extreme supply chain disruption. These issues cause extreme freight cost and customer delivery uncertainty, in addition to the physical constraints of moving products into and around major population centers.
As a result, alternative geographies to those closest to major population centers, such as the Wasatch Front, are experiencing growth at unprecedented rates. Utah boasts the only manufacturing base in the Union that continues to grow in concert with the base of square footage added annually. Those US markets that are considered business and employment friendly, with a depth of labor force, prime transportation infrastructure, highly educated workforce, and equally strong entrepreneurial and institutional business investment are poised to win. Utah has been ranked by Forbes magazine as one of the top three states in which to do business in each of the prior 10 years. Proximity to natural resources, quality of life, and diversity of business continue to drive one of the strongest industrial real estate markets in the country with exceptional net absorption relative to the size of its base of buildings.
The beauty of growth in this segment of our economy is its access to all Utahns. Irrespective of educational level, the State of Deseret provides an opportunity for all who call it home. Despite headwinds on many social and political fronts, our market continues to be a haven for small and large business investment, employment, and I am grateful to be a part of it.