A steep slowdown in warehouse construction is predicted in the coming months if economic conditions deteriorate as predicted. The spurt of new fulfillment center construction during the Covid pandemic is also likely to slow sharply as consumers who shifted from the real to the virtual world in their shopping habits reverse course.

 "It is expected the US will see a 'meaningful' downturn within the next 12 to 18 months," according to Interact Analysis, a London-based firm that studies global supply chain automation. "Consequently, Interact Analysis forecasts a decline in the rate of warehouse construction in the coming months. A significant decrease is expected in 2H 2023 and 1H 2024." The company noted that demand for warehouses has not slipped, but warehouses have taken a hit from poor economic conditions globally — rising interest rates in particular.

Even though the continuing growth of e-commerce is likely to cushion the shock slightly and 6,700 warehouses are expected to be built in 2023, this will still be a 35% reduction compared to the 10,000 built in 2022, though higher than pre-Covid levels, the company said. 

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