Steady progress. That’s been the theme of the South’s economy in 2013, and the dynamic has certainly been evident in many ways throughout this summer. Whether the measurement is commercial vacancy rates, home construction or manufacturing activity, the numbers provide powerful evidence that the region is experiencing a long-term recovery and will provide the conditions needed for its commercial real estate markets to thrive in the future.
In Atlanta, Orlando and South Florida – three of the region’s most important markets – office vacancy rates continue to dip, an important indicator that business activity is picking up and job markets are improving. The office vacancy rate in each of those metro areas ended the second quarter at least half a percentage point lower than where it stood nine months earlier.
As for manufacturing activity, July marked the seventh straight month that the Southeast Purchasing Managers Index (PMI) was above 50. The index measures the strength of the manufacturing industry in the area covering Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee. A score above 50 means the sector is expanding, while one below 50 shows it’s contracting.
Like the rest of the country, the South also continues to experience an exciting improvement in its residential housing market, which is such a powerful indicator of a region’s economic health. Single-family housing starts in the South were made at an annual rate of 314,000 in July. The number represents a slight increase from the preceding month and a 12.5 percent jump from July 2012.
We at Lincoln Property Company Southeast are excited about what the improving economy means for the commercial real estate markets in the South, and we look forward to bringing you more economic data on the region each month.