IE leads Southern California in logistics construction

By on June 14, 2017
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The Inland Empire added 20.6 million square feet of industrial-logistical space and had another 16.7 million under construction during 2015, far outdistancing Los Angeles and Orange counties in those categories, according to a report released Monday.

Much of that activity in Riverside and San Bernardino counties was driven by the rise of e-commerce, and the two-county region should get more logistics and warehouse construction in because it has open space that can be developed, the Los Angeles County Economic Development Corp. reported.

By comparison, Los Angeles County added 3.6 million square feet and had 2.8 million square feet under construction, while Orange County added 1.1. million square and had 625,000 square feet under construction during 2015.

The 64-page report, Goods on the Move: Trade and Logistics in Southern California, did not include data for San Diego County.

The Inland Empire and Los Angeles County accounted for approximately 90 percent of the warehousing and logistics jobs in Southern California during 2015, with 50 and 40 percent of those jobs, respectively.

Trade and logistics generates nearly $225 billion in economic activity in Southern California annually, including $43.5 billion paid to the people who work in that sector. More than 21,400 full-time jobs in logistics and warehousing are expected to open up in Southern California during the next five years, the report stated.

The economic development corporation is a non-profit entity founded in 1981 by the Los Angeles County Board of Supervisors. Its purpose is to retain, attract and grow businesses.

Despite its available land, logistics-warehouse construction could slow in the Inland Empire sooner than expected, said Jay Prag, professor of economics and finance at the Drucker School of Management at Claremont Graduate University.

“More and more of the logistics industry here is being pushed east, and logistics is to some extent time sensitive,” Prag said. “It’s getting lot harder to move product to where it’s supposed to go quickly, especially when you factor in [automobile] traffic.”