Industrial real estate implications

Industry employment trends (12-month change) | Metro Chicago

Source: Bureau of Labor Statistics, JLL Research, Crain’s Chicago Business

Job growth/loss by sector (12-month change) | Metro ChicagoAs real estate development and public infrastructure projects have returned to Chicago so has the demand for construction workers. Last August, the month when employment in the construction sector peaks, 139,600 people worked in Chicago’s construction sector. It was the best summertime showing since 2009 when employers started laying off workers in response to the recession. As of last month there were 127,200 workers in that sector, an increase of 8.6 percent year-over-year, the largest percent gain across all of the employment sectors. New apartment and hotel towers, office buildings, an expanding industrial sector and big public projects such as the state tollway authority's capital improvement program are driving this payrolls growth.

Indeed, as construction employers are hiring they are also paying more. Wages are improving and that is expected to continue as the labor market tightens. This is a positive sign that, as workers are earning more, they will spend more on consumer goods, housing, and travel - all of which will fuel the local economy.

Total jobs vs. Unemployment rate | Metro Chicago

5.4%Metro Chicago unemployment

0.9%Metro Chicago 12-month job growth

5.5%U.S. unemployment

2.4%U.S. 12-month job growth

Milli

ons

Peak: 3,959,200 jobs

Number of jobs

• The local unemployment rate has reached a low not seen since April 2008 and it is in its tenth consecutive month of relatively sharp decline.

• The thinning ranks of Chicago’s unemployed was driven more by organic growth as opposed to workers leaving the job market (as seen in other major metros). This is an encouraging indicator that the improved economy is seeing upside in more than just a few employment sectors.

• Total U.S. nonfarm employment increased by 295,000 jobs in February, topping consensus forecasts of 235,000 jobs. The private sector has added 12.0 million jobs over 60 straight months of job growth, extending the longest streak on record.

• Meanwhile, U.S. unemployment decreased 20 basis points to 5.5 percent, its lowest rate in seven years. One area of continued apprehension among economists is wage growth, which remained unchained at 2.0 percent year-over-year in the latest BLS report. In a healthy economy, annualized wage gains are typically between 3.5 and 4.0 percent.

Industrial Employment Update

Metro Chicago | March 2015

Thou

sand

s

3,000,000.0

3,100,000.0

3,200,000.0

3,300,000.0

3,400,000.0

3,500,000.0

3,600,000.0

3,700,000.0

3,800,000.0

3,900,000.0

4,000,000.0

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%Total Employment

Unemployment

3.6%

Financial Activities

Federal Government

Trade, Transportation & Utilities

Leisure & Hospitality

Mining and Logging

-3,000 2,000 7,000 12,000 17,000

-2,500

-1,000

-900

-800

-700

900

5,700

6,500

11,000

18,300

2010 2011 2012 2013 2014-120

-100

-80

-60

-40

-20

0

20

40

Mining, Logging & Construction Trade, Transportation & Utilities

Manufacturing Other Services

For more information, please contact:

Robert KrampSenior Vice President – AmericasMidwest Research Directortel +1 312 228 2470Robert.Kramp@am.jll.com

Trevor RagsdaleManaging Directortel +1 773 458 1390Trevor.Ragsdale@am.jll.com

© 2015 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

December 2012 December 2013 December 2014

Total non-farm employment

3,770,200 1.7%

3,819,200 1.3%

3,855,700 1.0%

Unemployment rate 8.9% 8.3% 5.4%

Metro Chicago supersectors December 2012 December 2013 December 2014Mining, Logging & Construction 116,800 1.1% 116,200 -0.5% 127,200 9.5%

Manufacturing 320,900 -0.2% 316,300 -1.4% 315,500 -0.3%

Trade, Transportation, & Utilities 774,400 1.5% 787,800 1.7% 787,100 -0.1%

Information 75,100 0.8% 75,300 0.3% 74,300 -1.3%

Financial Activities 258,200 0.5% 258,500 0.1% 256,000 -1.0%

Professional & Business Services 667,800 4.6% 685,100 2.6% 703,400 2.7%

Educational & Health Services 579,900 1.6% 592,600 2.2% 599,100 1.1%

Leisure & Hospitality 348,400 3.8% 353,500 1.5% 359,200 1.6%

Other Services 165,000 -0.3% 166,000 0.6% 166,900 0.5%

Government 463,700 -0.2% 467,900 0.9% 467,000 -0.2%

News on the street | Metro Chicago businesses expanding, contracting, etc.

Employment statistics | Metro Chicago Industry employment stratification | Metro Chicago

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Bergstrom Inc.│ Manufacturing: Contracting

Bergstrom Inc., a motor vehicle parts manufacturer, will be permanently closing its facility at 540 Joyce Road in Joliet due to relocation. The company’s layoffs will affect 80 employees, starting May 1, 2015. Bergstron leases a 96,000 square-foot facility adjacent to the Rockford Airport which will remain operational. Jelly Belly │ Food manufacturing: Contracting

Jelly Belly’s 233,000 square-foot owned warehouse and visitor facility in Pleasant Prairie, Wisconsin will be closing, affecting 25 employees. Jelly Belly has operated the Pleasant Prairie facility since 2000 and will still provide visitor tours through the summer. The company will be moving warehouse operations to Tennessee and production of all Jelly Belly candy to California.Trunk Club │ Apparel: Expanding

Men's clothing startup Trunk Club is expanding 17,000 square feet of office space in River North and 170,000 square feet of warehouse space in Goose Island. Trunk Club is more than tripling its current warehouse space in a 280,000-square-foot building at 930 W. Evergreen Avenue on Goose Island owned by Mars. The company plans on launching a women’s brand.Toolamation │ Manufacturing: Expanding

The Beach Park, IL. based machine and tools manufacturer will be moving its headquarters and some of its manufacturing operations to Kenosha, WI. The move will include the relocation of 50 jobs as well as an addition of 16 jobs over the next three years. Toolamation will receive a $490,000 loan from Kenosha Area Business Alliance as well as $300,000 in tax credits over the next three years authorized by the Wisconsin Economic Development Corp.U.S. Steel│ Manufacturing: Contracting

U.S. Steel plans to permanently close its coke-producing plant at Gary Works in Gary, IN by May 27, 2015. An estimated 300 jobs that command some of the highest wages in the local manufacturing sector will be permanently displaced. U.S. Steel plans to import coke, a purified form of coal, instead of producing it itself at the Gary Works plant.

Trade, transportation and Utilit ies, 787100, 20%

Professional and Business Services, 703400, 18%

Educational and Health Services, 599100, 16%

Government, 467000, 12%

Leisure and Hospitality, 359200, 9%

Manufacturing, 315500, 8%

Financial Activit ies, 256000, 7%

Other Services, 166900, 4%

Mining, Logging and construction, 127200, 3%

Information, 74300, 2%