Booming demand for warehouse space, bolstered by the record 423.7 million square feet of industrial property under completion this quarter, could lead to significant labor shortages in the near term.

A new report from Newmark estimates that more than 280,000 additional warehouse workers will be required to support activities within new facilities currently under construction—and notes that employees from other sectors are increasingly shifting to these types of jobs. That's particularly true for the warehousing and transportation sector, where approximately half of current employees previously worked in retail/wholesale and administrative services. 

"This flow is likely to accelerate: recent national wage growth in those sectors lagged gains in warehouse and transportation wages, which grew by 4.25% from January to June 2021, a record 6-month gain for the sector," the report notes. "Additionally, COVID-19 has had a significant impact on industry demand shifts and the subsequent reallocation of labor across sectors, illustrated in part by the widespread, temporary closure of non-essential retail while e-commerce activity soared. Retail re-hiring needs are difficult to forecast, but some of this labor reallocation to warehouse and transportation is likely to remain permanent."