Office space demand outpaces rising construction

Professional and business services plus financial services employment are expanding faster than the overall labor market, boosting office absorption over the last 12 months. Strengthened corporate and small-business sentiment has supported hiring, lifting the total number of job openings to an all-time high. The tight employment market has led companies to elevate their recruitment of recent college graduates for their office-using positions, growing space demand even further. Office development has accelerated through the growth cycle and will reach 81 million square feet this year, but deliveries remain significantly lower than the 117 million square feet averaged throughout the 2000s. Restrained construction and growing absorption will continue the six-year trend of vacancy declines and escalating rent.