A study released April 30, 2007, by the National Association of Industrial and Office Properties demonstrates that the development, construction, operations and maintenance of commercial real estate has a “ripple” effect on the U.S. economy, contributing $500 billion to U.S. gross domestic product (GDP) and generating more than 4 million full-time jobs.

Researched by George Mason University professor Stephen Fuller, The Contribution of Office, Industrial and Retail Development and Construction on the U.S. Economy report concluded that the $148 billion of direct spending on office, industrial, warehouse and retail construction in 2005 added approximately $347 billion directly and indirectly to the economy, contributing nearly half a trillion dollars to GDP. The study also found that this spending generated 4.2 million full-time jobs nationwide and added $156 billion to personal earnings.

“Fuller’s finding that nonresidential construction has a multiplier or ‘ripple’ effect on the economy is also significant because the strength of the commercial real estate market has partially offset recent declines in the residential market and helped to keep the economy growing. The pace of nonresidential construction typically lags the pace of residential construction, so it is likely that nonresidential construction will continue to support economic growth during future cyclical downturns.”

The study determined that the top 10 states with the largest amounts of direct spending on office, industrial, warehouse and retail construction accounted for 52 percent of total nonresidential construction in 2005, while the top 20 states accounted for more than 75 percent. The top five states included California, Texas, Georgia, Florida and Illinois.

Click here to download a copy of the report.