The industrial sector has rebalanced in 2024 and is again growing at a steady pace after experiencing softer demand as the pandemic-fueled e-commerce boom waned last year, according to a CommercialEdge industrial market report for September.

Census Bureau figures show a 1.3% increase in e-commerce sales for the second quarter and 6.7% year-over-year growth, and e-commerce's share of core retail sales has reached its highest level since the peak of the pandemic. The industrial segment also is being bolstered by a growing warehouse and storage sector, which has added nearly 25,000 jobs so far this year after shrinking 8.5% between May 2022 and December 2023. Reports that powerhouse Amazon is increasing its lease activity are a positive sign for the industrial sector.

However, the industrial real estate sector continues to face challenges related to the massive supply response to demand during the pandemic. More than 1.1 billion square feet were completed in 2022 and 2023. E-commerce fulfillment, which requires three times as much industrial space as traditional retail sales, should help absorb some of this supply and will remain a primary driver of industrial real estate in the near and long term, said CommercialEdge. Big Box retailers will also help drive the industrial sector, particularly Walmart, which is opening a number of distribution centers to compete with Amazon.