Amidst the persistently sluggish state of global trade, prospects for a substantial surge in demand for warehousing services this year remain dim, as highlighted by the latest research from Transport Insight (Ti). Their recent study reveals that the lacklustre performance of the global economy in the first quarter has resulted in a moderation of the demand for new warehouse leases on a global scale.Ti’s newly launched Warehousing Tracker, a quarterly report tracking a range of metrics across operating costs, rents, capacity, and new supply and demand dynamics, sets out to map expectations for warehousing dynamics.According to Ti, trade figures remain a pivotal macroeconomic indicator for gauging the prevailing demand landscape in the warehousing sector. In simpler terms, when global import and export volumes decline, the need for warehousing services diminishes as there are fewer goods in circulation, translating to reduced demand for storage and distribution services.Several factors continue to contribute to the current economic slump, including the rise in global commodity prices. Food and energy prices remain high by historical standards and continue to erode real incomes and import demand in many economies.“Looking forward, a rebound in global trade volumes, aided by global economic recovery, will positively affect the demand for warehousing services, although this will most likely be in 2024 and beyond,” reads the report. “This outlook is also uncertain and has multiple downside risks, including the outcome of Russia’s war of aggression in Ukraine, as well as persistent inf lation and tightening fiscal policies. Particularly in the short term, global trade recovery, and subsequent warehousing demand, is likely to remain muted.”At the same time, warehousing developers and investors are likely to pull back on the commissioning of new construction projects as borrowing costs remain high and the return on investment regarding warehousing projects has become less pronounced.
