NEW YORK CITY—The economy may have slowed its pace of growth at the start of this year, but Cushman & Wakefield doesn't see that continuing. “Although the economy hit a soft spot in the first quarter, we expect stronger growth for the balance of the year to boost full year gross GDP growth to about 3.0% to 3.5%,” the company says in its weekly economic update, prepared by senior managing director Ken McCarthy.

With much of the Q1 data having been released, indications are that “the economy remained sluggish in the first quarter of the year and the US GDP probably grew at about a 1.0% to 1.5% annual rate,” McCarthy writes. “This would be a slowdown from the already sluggish 2.2% rate of growth” in Q4, and can be attributed mainly to weaker consumer spending.

After growing at a 4.4% annual rate in Q4 of last year, consumer spending is estimated to have increased at approximately a 2.0% pace in Q1. “This would be the slowest rate of growth since the first quarter of 2014, when severe winter weather caused consumer spending growth to slow to a 1.2% annual rate,” writes McCarthy. “The slowdown in consumer spending this year was clearly caused by the second consecutive year of severe winter weather.”

On the plus side, real after-tax income increased 6.9% annually between December of last year and February this year. The price of a barrel of oil remained between $40 and $50 for most of the quarter, and averaged $48.72, less than half the $98.57 per barrel price recorded a year earlier. McCarthy notes that the Bureau of Economic Analysis estimates that the proportion of after-tax income that consumers spent on energy in the first two months of this year was the lowest since 2002. And consumers began the year in their most optimistic spirit in more than a decade, judging by the University of Michigan's Consumer Sentiment Index.

Nonetheless, consumer spending, adjusted for inflation, “barely rose, up less than 0.1” in the quarter. However, McCarthy notes that weather evidently kept shoppers home in February, dragging Q1 down even though March retail sales rose by 0.9%.

“We expect that these healthy spending drivers—high confidence, rapid income growth and less need to spend on energy—will enable consumers to increase spending at a much faster pace in the second and third quarters,” McCarthy predicts. “In other words, it really was the weather and now that spring has come, consumers will be back at the stores and spending will rebound.”

The implications across the commercial real estate spectrum go beyond the positive impact on store sales. McCarthy writes, “For the real estate sector, strong consumer spending will have numerous positive effects, from boosting the retail sector to increasing travel and tourism to pushing up demand for industrial space.”

As the consumer goes, “so goes the economy in the US, and we expect the consumer to raise spending at a much faster pace” in Q2 and Q3, writes McCarthy. Accordingly, he adds, “A stronger economy is expected to boost demand for all sectors of commercial real estate over the balance of 2015.”