Retail construction continues to stagnate and slow even as overall natioinal employment, and retail jobs in particular, begin to improve. Crains Chicago Business reports a 25 year low in retail construction activity. The report focuses on retail mall development, highlighting the recent transfer to receivership of the Block 37 mall project, however it is unclear if smaller non-mall development and single site storefront retail activity is factored into the report. Downtown, urban retail may not be suffering to the same extent as suburban mall developments.
Even as retail construction continues to falter, retail employment has finally begun to improve. The U.S. Department of Labor reports job losses are slowing down. While the U.S. economy lost 22,000 jobs overall to start 2010, the retail industry added 42,100 jobs in January. Apparel, grocery and electronics lead the way with hardware and building supplies trailing.
Retail Architectural firms continue to struggle with a contraction of billing for retail design services which began in 2008. A recent AIA survey based on information gleaned from their membership, Moody’s, McGraw Hill, and others, suggests a 2010 decline in retail construction of over 17%. This compares to an overall 13% decline for all non-residential construction. Improvement of 1.8 percent is predicted for 2011 but details for the retail industry were not broken out. Once again it is difficult to determine if these statistics include small retail infill and tenent improvements or only development projects.
Some indicators point to overall economic improvement in 2010 but both residential and non-residential construction typically lag emplyment and general economic recovery. Is February too soon to start looking forward to next year?
Click on the Reed Construction Data link above to see their take on retail construction trends. They forecast a 5% increase in 2010 with best growth from retailers going into smaller developments. This forecast is from October 2009 and draws on different data sets than the AIA survey. There is a great chart showing statistics for economic factors related to their forecast such as consumer confidence and retail leasing rates.