IndustrialReports

Denver Well-Positioned for Industrial Labor Supply, Quality and Cost

DENVER –  A  new report from CBRE examines how the industrial sector is tackling labor shortages in response to the growth of e-commerce. The CBRE research team analyzed major, regional and emerging industrial hubs to identify some of the metro areas offering a good combination of labor supply, quality and cost, and Denver came out as a strong contender, as a market offering high industrial labor supply at a relatively affordable cost.

“Denver has seen impressive growth in our warehouse and distribution workforce, which mirrors the industrial real estate expansion. Colorado’s robust net in migration over the past several years has helped fill new positions across all industries, and existing labor availability is an increasingly important consideration among decision makers of industrial companies in Denver. As important is where population growth is occurring – particularly in the northern and eastern regions of the metro area,” said Tyler Carner, senior vice president with CBRE Industrial & Logistics in Denver.

According to CBRE’s analysis, Denver saw a 20.6 percent increase in its transportation and warehouse (T&W) employment population from 2013 to 2017, the equivalent of 9,550 new workers. This was the fourth-highest growth rate among the regional hubs/second-tier industrial and logistics markets studied in the report. Denver’s total T&W employment in 2017 reached 56,000, which represents 3.9 percent of total market employment. Central Valley, California, led the second-tier markets for growth with a 45.7 percent increase over the same five-year span, followed by Indianapolis (23.3 percent) and Columbus (21.6 percent). California’s Inland Empire led among the major industrial hubs/established markets with a growth rate of 46.8 percent.

“Increasingly, development of e-commerce warehouses is contingent not only on close proximity to large customer populations but also on finding increasingly scarce labor,” said CBRE Global Head of Industrial & Logistics Research, David Egan. “Warehouse users will want to ensure that access to qualified labor is a priority in their considerations for expansion. Several markets, especially those with strong population growth, offer ideal conditions for staffing up distribution centers.”

CBRE’s report also identified two additional tools for solving the labor crunch. First, investing in more automation – robots in the warehouse and autonomous trucks – can help mitigate labor scarcity by boosting the efficiency of an existing workforce. Some measures forecast the productivity gain in the transportation-and-distribution industry to be as much as 46 percent. Second, recruiting workers from other industries has worked well for the warehouse-and-distribution sector in recent years.

“Site selection for today’s warehouse users and developers is a complex exercise of weighing trade-offs including speed to customer, transportation costs, location incentives, real-estate economics and labor,” said Adam Mullen, Americas Leader for CBRE’s Industrial & Logistics business. “The most intelligent site selection efforts never lose sight of the fact that labor accounts for more than 20 percent of total supply chain cost, and up to 75 percent in final-touch distribution. Its importance can’t be overstated.,” said Kristin Sexton, senior managing director of CBRE Labor Analytics, “Employers often face significant challenges in assessing a given labor market and how its many facets might apply or not to their companies’ needs. But one thing is certain: Labor is a
critical resource for most modern employers, especially those in the rapidly expanding and evolving field of distribution and warehousing. Effectively operating in this industry will require smart analysis of labor sources for many years to come.”

 

Previous post

Colorado's Largest Industrial Building Sells for $40.75M

Next post

Lakewood Senior Living Community Tops Out

No Comment

Leave a reply

Your email address will not be published. Required fields are marked *