Warehouses on the Rise; A Look at the Data

After the global pandemic completely upended health, life, work and the economy as we all knew it, we’re all overdue for some good news. Luckily, our friends in commercial construction can rejoice: warehouse development is on the rise and providing ample work for all of us. Whether your company is in metal fabrication, or you work in another capacity of steel frame construction, here’s a look at the promising data around warehouse development.

In a League of Their Own

According to Steve Jones, senior director of Industry Insights Research at Dodge Data & Analytics, warehouses represent roughly 30% of commercial construction activity currently. Warehouses were up 6% in 2020, when most other sectors were down, proving to be an essential and valuable part of e-commerce, which has been consistently skyrocketing in recent years.

Case in point: “Throughout 2020, non-residential building starts have seen large declines in almost all segments. The only categories to grow during the year were warehouses, courthouses, police & fire, prisons and military. Warehouse building, in particular, was boosted by investment in logistics capabilities as customers moved en masse towards online shopping.” Even better, the consensus among industry experts is that this trend won’t be slowing down anytime soon.

The Companies Behind the Buildings

We’ve all heard of the biggest players in warehouse development and, at QuickFrames, we’re lucky to call many of them customers. We’re proud that our rooftop equipment supports are in numerous of the biggest warehouses in the U.S. and Canada. But I digress…

Here is an interesting list of the 10 largest U.S. warehouses, which all happen to be connected to Amazon except one. Richard Branch, chief economist for Dodge Data & Analytics, offered some insight into this, saying, “Amazon continues to build huge logistics centers while taking over vacant big box spaces and turning them into distribution spaces for the ‘last mile’ of delivery.” In addition to Amazon and its fulfillment centers, other major warehouse projects are being driven by Apple, Facebook, Google and more.

Branch expects the healthy expansion in this sector to continue, to the tune of around 8%. It’s also worth noting that, as warehouses advance technologically, their square footage is also increasing, leading to bigger projects and bigger budgets.

Warehouses, By Area

Since we’re based in Mesa, Arizona, we wanted to take a look at what’s going on in our own backyard. It turns out that Arizona is number eight in the U.S. for contributions to state GDP created by industrial development, and also the number eighth state for warehouse development. According to the most recent data available, “construction and development of Arizona industrial and warehouse, office, and retail created and supported 83,805 related jobs and contributed $11 billion to the state’s economy in 2020.”

Across the entire U.S., warehouse development growth rose from $22.563 billion (USD) in 2019 to $22.853 billion in 2020. The projection for 2021 is another increase, to $23.413 billion, trending up to $26.764 billion by 2025.

In Canada, the numbers are smaller but the growth is still promising. Warehouse development went from $1.444 billion (CAD) in 2019 to $1.727 billion in 2020. Projections for 2021 are for an increase to $1.983 billion by the end of the year, trending up to $2.327 billion by 2025.

As Thomas J. Bisacquino, president and CEO of NAIOP, noted, warehouses are giving construction a bright future. In his words, “The industrial and warehouse sectors will continue to expand as e-commerce demand intensifies, and the retail sector will be reshaped as the shopping experience evolves.”

We’re thrilled about these promising numbers, and the opportunities they represent in construction. If you have a warehouse project underway or are expecting one in the near future, please give us a call. We’ve provided our pre-engineered frames to many other warehouses across the U.S. and Canada and can save you a lot of time and hassle, too. Or, as always, you can start a fast quote here.