The Logistics Sector Continues to Drive Gains in the Market
By Trenton Turner CoStar Analytics January 29, 2021 | 5:47 P.M.
Atlanta has gained back roughly 93% of all jobs lost since the onset of the coronavirus pandemic, according to the most recent jobs report from the Bureau of Labor Statistics. Among major markets nationwide, the region ranks in the top five for employment gains since February.
The Atlanta market added 25,100 new jobs in December, putting the region back to mid-2019 employment levels. It has added an average of about 24,000 jobs per month since July, a sign that the region’s economy has been able to withstand the effects of the most recent wave of coronavirus cases.
Sustained weakness in the leisure and hospitality industry is keeping the region from returning to pre-coronavirus employment levels. The leisure and hospitality sector experienced the largest losses from March to April and accounted for one-third of Atlanta’s job losses. While the sector gained 6,300 jobs in December, leisure and hospitality employment remains almost 8% below pre-coronavirus levels, making it the worst performing sector in Atlanta besides Other Services.
The trade, transportation and utilities sector has continued to exhibit strength, with 11,600 local jobs added in December. The sector was the first to surpass pre-coronavirus employment levels, and total employment in the sector is now about 6% above February figures. While some of this growth is from a ramp up in hiring due to the holiday season, year-over-year growth is also positive, signaling that the sector’s recent performance is not just due to seasonal effects.
As for the impact of these jobs figures on the commercial real estate industry, notable trends are emerging in Atlanta’s industrial sector. The market absorbed over 16 million square feet of space in 2020, putting the region in the top five nationally for absorption. With third party logistics firms and retailers expanding e-commerce operations in the region, the elevated demand is leading to more hiring, helping boost the trade-transportation-utilities sector.
The region is poised for another strong year with several firms set to move into large blocks of space. In Henry County, Radial is moving into 761,000 square feet and Purple Innovation into 520,000 square feet this quarter. In Austell, Pratt Industries is taking up 410,000 square feet of space this quarter, while medical supplies company ASP Global is moving into 355,000 square feet in June.
Other major firms that have committed to hiring industrial workers in metropolitan Atlanta throughout 2021 including Amazon, Home Depot and Masterbrand Cabinets.
The new move-ins by these corporations will infuse thousands of new jobs in the logistics sector this year.