COTD: Factory space demand falls despite manufacturing GDP rise

Rental prices also don’t explain the drop in factory space demand.

Factory space demand has continued to fall despite a rise in manufacturing gross domestic product, according to a Savills report.

Covering the period from 2005 to 2024, the report found that net annual demand for both multiple- and single-user factory spaces, collectively referred to as "factory space", has been trending down, even though manufacturing GDP has been rising by an average of $3.5b annually in constant 2015 dollars.

Contrary to expectations, the analysis revealed no statistically significant relationship between factory space demand and manufacturing GDP.

Savills also examined rental prices as a potential factor but found that rents were similarly not significant in explaining the decline.