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Cushman & Wakefield
AMERICAS EUROPE APAC GLOBAL APPENDIXIT’S ALL ABOUT JOBS
Ironically, in some areas, the prolonged consistency in the
labor markets might ultimately be what slows demand for
office space. After eight years of continued expansion, albeit
a slow one, some of the world’s labor markets have tightened
substantially, making it difficult for businesses to fill open
positions. In the U.S., the unemployment rate fell to 4.4%
in June of 2017, fully back to pre-recession levels. At the
same time, wage pressures are rising. The unemployment
rate in Canada is expected to decline from 7.0% in 2016 to
6.6% in 2017—the best year of the cycle by far. Mexico’s
unemployment rate is expected to register 3.5% (nationally)
in 2017 and remain below 4% through 2018. In the Asia Pacific
OFFICE-USING JOB GROWTH
Source:
Oxford Economics, Moody’s Analytics, Cushman & Wakefield Research
*Greater China cities include new full-time employees in the services sector.
region, unemployment is now 20 BP lower than at the peak
of the last cycle. Europe’s recovery, which has generally
lagged that of the other regions, has a bit more labor slack.
But even so, certain cities such as London and Berlin have
unemployment rates that are at near record lows. Thus, many
parts of the world are nearing fuller employment.
This does not mean that job creation will end. Many cities still
have room to run until full employment is achieved. Even at
that point, population growth and migration will continue to
support employment growth in most places. But tighter labor
markets does mean that job growth will generally be on a
decelerating path from this point forward, particularly in tech
and Tier-1 cities, where labor shortages are the most acute.
With this in mind, a changing of the guard should be
expected:
Tier-2 cities will emerge as the new growth
leaders
in the cycle as businesses expand into markets where
workers are easier to find and less expensive to hire. To be
clear,
Tier-1 cities will still continue to contribute the lion’s
share of all jobs
created worldwide due to their sheer size.
But it is the Tier-2 cities that are still generally accelerating.
When we add it all up, the world economy will create 9.9
million net new office-using jobs over the next three years,
down from the 10.7 million created in the prior three years,
but still solid.
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2
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Europe
Americas
*APAC
Global
Millions
Last 3 Years (2014-2016) Next 3 Years (2017-2019)