Seasonally Adjusted Annual Rate
The economy grew at a solid 3.2 percent annualized rate in the fourth quarter according to the advance estimate of gross domestic product from the Bureau of Economic Analysis. GDP totaled $13.38 trillion in constant 2005 dollars, finally rising above the pre-recession peak of $13.36 trillion in the fourth quarter of 2007. Consumer spending and net exports powered the expansion, adding 3.0 and 3.4 percentage points to GDP. Businesses pared down inventories, which subtracted 3.7 percentage points. Strong exports and lean inventories are supporting the manufacturing sector and will generate demand for industrial real estate, both manufacturing and warehouse-distribution properties. Many economists raised their GDP forecasts in response to the $858 billion package of tax cut extensions and new tax cuts passed by Congress in December. Expect GDP to grow in the range of 3.5 to 4 percent in 2011, beating the 2.9 percent rate of growth in 2010 and above the economy’s “cruising speed” of around 2.5 percent. This will boost commercial real estate leasing activity above last year’s levels.
Source: Bureau of Economic Analysis, Grubb & Ellis