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BOSTON-The present situation in the industrial market may appear dismal, but the long-term outlook is extremely positive, according to a new report from Torto Wheaton Reason. While acknowledging that weak demand has temporarily damaged the market, report author Laura Stone Mortimer calls the benefits of globalization and a more open economy bright spots for sustained growth over time.

“The US economy is becoming more open and globally integrated,” says Mortimer, a Torto Wheaton vice president and managing economist. “As a consequence, trade—measured by the sum of imports and exports of goods—will continue to account for an increasing share of GDP.”

She bases her optimism largely on the likelihood that over the next 10 years many emerging markets in Asia, Europe and Latin America will contribute to increases in global trade as their economies and currencies gain strength, much as China has done in the current decade. In addition, she says, the US is regaining ground as a major exporter.

“With the dollar’s recent weakening, our exports have become more attractive worldwide, creating greater demand for American-made goods,” the economist remarks. “Historically, the US consumer has demanded more foreign-made goods than foreign consumers have demanded American-made. This, however, is currently reversed, resulting in a more open economy. Over the long-term, export demand for US goods and services is anticipated to continue to grow.”

According to Mortimer, growth in warehouse demand may well outpace growth in domestic economic output due to increased globalization and a long-term trend in which trade will represent a growing share of the GDP.

“As such, our demand forecasts are slightly more optimistic over the longer term once the economy enters its recovery phase,” she says, noting that trade, which until 2004 represented less than 20% of the GDP, has grown to represent about 30% of GDP today. “At this pace, trade as a share of GDP could continue to grow to as much as 40% over the next decade,” she ventures.

The change, she continues, will have a significant impact on the nation’s industrial markets, particularly those that serve as transshipment centers and those that are well-positioned, in terms of minimizing transportation costs and serving large areas of the population. “The role the US plays in world trade and the distribution of goods will be increasingly important,” she concludes.

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