For electrical contractors specializing in work for warehouses and logistics facilities, things are looking up. According to the “Global E-Commerce Outlook: What is Driving E-commerce Growth in Different Markets,” report from CBRE, the United States will need to add 330 million square feet of warehouse space dedicated to online retail business fulfillment by 2025 to keep up with the anticipated continued growth of e-commerce sales over the same time.
And, according to CBRE, the demand for this new space isn’t expected in just the future. It is needed now. Vacancy rates for industrial real estate space, including warehouses and logistics facilities, have been low around the nation for several months, leading to a demand for new construction to keep pace with the robust demand.
According to the report, a mere 8% of global retail sales in 2015 were online, representing $1 trillion in sales. By 2020, that increased to 18% and represented $2.4 trillion in sales. This represents a 140% increase in global e-commerce sales over the past five years.
The pandemic has helped spur the increase in e-commerce business, but this increase is being sustained beyond the pandemic, with the report noting that, “Internet sales have increased rapidly during the pandemic, with a lasting effect.”
For the United States specifically, the report notes that the nation is expected to experience “below global average economic growth” overall, but this will be in “an environment of high e-commerce penetration.”
While growth of e-commerce sales has been strong in the past, it is expected to get even stronger in the future, with the report estimating that, by 2025, online sales will represent 25% of all retail sales.
This, according to the report, is leading to an “accelerated transition from traditional retail to e-commerce, driving strong demand for logistics space.”