Economic Growth To Exceed 3% in 2014

LOS ANGELES-According to the latest research brief from Institutional Property Advisors, the economy is expected to exceed 3% of growth this year, the highest growth since 2005. This is followed by an impressive yearend in 2013 with GDP up 3.2% in the fourth quarter, boosting GDP growth in the final 6-month period to 3.7%—the largest 6-month period of growth since 2003.

Much of the growth is driven by renewed consumer spending, which is expected to increase by 3.3% this year. As a result, demand for retail space will rise 1.6%, bringing retail property vacancy rates down to about 6.6%. Multitenant buildings will also benefit with those vacancy rates falling to 8.5%. The boost in consumer spending will serve well, helping to balance out declining economic stimulus from the Federal government. IPA predicts the FED will close out quantitative easing by yearend.