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BOSTON-Despite the recent decline in US trade, the biotech trade sector appears to be flourishing. According to a June report from Torto Wheaton Research, while overall trade in both imported and exported goods plummeted over the past year, biotech exports actually grew by a substantial amount.

Data from the report, Biotech: A Dose of Happy Pills in a Depressing Industrial Market?, show biotech exports for the first four months of 2009 were up a remarkable 57% over the same period last year. The total value exceeded $4 billion. “[T]his is quite an impressive performance given that many industrial manufacturing-related sectors, such as the domestic auto industry, are shrinking,” says Torto Wheaton economist Luciana Suran, author of the report.

Suran is quick to point out, however, that biotech goods make up only about 2% of US manufacturing exports in terms of dollar volume. But she also notes this share has been growing steadily over the past decade. Furthermore, the increase has been pretty broad-based among individual countries and regions, with 95 of 153 reporting countries reporting increased purchasing of US biotech products. Countries and regions showing the greatest increase in imports include the UK (239%), Mexico (81%), Brazil (70%), the European Union (66%), and China (38%). But biotech exports to Middle Eastern and African countries such as Egypt and the United Arab Emirates are also up sharply.

In regard to real estate demand, Suran notes the biotech employment has continue to grow in some metro areas despite the recession. In the past year, biotech-related employment grew in 21 of the 62 industrial markets tracked by TWR. While some, including San Jose, the Washington-Baltimore corridor and San Jose, are long-time biotech stalwarts. Others such as Houston, Gary, IN and Miami have only recently emerged as life-science centers. The researcher says the changed economic landscape has prompted many biotech companies to relocate to cities and states with lower tax rates and less red-tape.

According to Suran, global demographic trends, including population growth in emerging markets and increased average life expectancy, are expected to contribute to a rising demand for biotech products. And as biotech employment grows, so does demand for R&D space. The accompanying chart shows markets tracked by TWR that have experienced more than 100,000 square feet of positive net R&D absorption the recession began in late ’07. But it’s not just R&D space that will be needed to accommodate the sector’s increased activity, Suran continues. “All of these medicines and medical equipment require a hefty amount of warehousing and distribution space as well,” she notes.

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