After Seeing Unprecedented Demand During Pandemic, Large Logistics Properties Head Into a Weaker Environment in 2023

The economic backdrop for logistics real estate appears to be reverting to pre-pandemic norms. Consumer spending has shifted from goods back to services, with real goods consumption remaining effectively flat in 2022, marking the slowest year for goods consumption since the Great Recession, while services consumption continues to rise. Consumer confidence readings, from both the Conference Board and the University of Michigan, have remained weak relative to pre-pandemic levels throughout 2022, with consumer plans to purchase homes and big-ticket appliances cooling further in December.