As economies around the world remain volatile, the implication on the flows of goods and materials in and out of the U.S. has been meaningful. JLL’s research team explores the impact of six key developments on the warehouse and distribution market.
How does uneven GDP growth abroad affect the U.S.?
Growth on a global scale has become woefully uneven with developing nations like China slowing, and countries across Europe hardly growing. The result has been a flight to quality by many market participants, which has produced a swift rise in the dollar. As a result, containerized ship exports have fallen nearly 30.0 percent over the past year, bringing them to their lowest level since 2010.
Will less manufacturing in China become a boon for other developing economies?
China has begun the slow process of evolving its economy into one that is more service based, thereby reducing its dependence on manufacturing. Chinese wages have more than doubled over the past five years, and are likely to surpass those of other manufacturing based economies. As the country transitions, other economies around the world will have an opportunity to become alternatives to China. While some Southeast Asian economies may be best poised to take over China’s role, over the long-term several other new nations may be able to enter the fold.
Will a rise in Mexican manufacturing create greater demand for intermodal? And inland ports?
Developing economies now make up 39.0 percent of global output. Over the next decade Mexico is expected to become a larger part of that output. The automotive industry has already begun to utilize the budding manufacturing-hub, making the country the second largest exporter of cars to the United States. In response to Mexico’s growth the trucking and rail industries have announced plans to increase their capacity and ability to service exports from the country.
Read about the three other developments in JLL’s Industrial Impact paper.