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The global warehousing sector is set for sustained growth through 2025, driven primarily by consumer spending, according to the Q3 2024 Warehousing Tracker from Ti Insight
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Increased logistics demand and steady manufacturing output expansion from the second quarter onwards will also be factors in the expected growth
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Warehouse take-up is likewise predicted to stay strong across all quarters, indicating continued demand for storage and distribution space
The global warehousing sector is set for sustained growth through 2025, driven primarily by consumer spending, according to the Q3 2024 Warehousing Tracker from Ti Insight.
Increased logistics demand and steady manufacturing output expansion from the second quarter onwards will also be factors in the expected growth.
Warehouse take-up is likewise predicted to stay strong across all quarters, indicating continued demand for storage and distribution space.
On the other hand, vacancy rates are seen to rise intermittently, especially in the fourth quarter of 2024 and the second to fourth quarters of this year.
This suggests that while demand is rising, new supply may not be keeping pace, according to Ti Insight.
After this first quarter 2025, new warehouse supply is seen to rebound, which may help stabilize availability but may not be enough to prevent upward pressure on rental costs. These are expected to rise steadily from the first quarter onward.
On the cost side, warehousing operators will face mounting financial pressures as rent, labor, and overall operating expenses trend upward this year.
Energy costs, meanwhile, provide some relief in the short term, stabilizing from Q2 2025 onward. The expected rise in labor costs in the first semester, along with consistently rising rents, will contribute to higher overall operating costs.
With interest rates staying stable across all quarters, some financial predictability can be expected. But with logistics demand still growing, companies will likely need to optimize efficiency and invest in automation to offset rising costs.
Thus, the warehousing industry is poised for expansion, but profitability will depend on strategic cost management and supply chain innovation.
Last year, sentiment on global warehousing showed a generally positive outlook for volumes, costs, and demand, albeit with some fluctuations.
A strong upward trend was seen in volumes sentiment, especially in the second and third quarters, last year. This suggested an increase in warehouse activity compared to the previous year.
Costs sentiment, meanwhile, was also on the rise, notably in the second and third quarters last year. This indicated an increase in operational expenses, possibly due to higher labor, energy, and storage costs.
Demand was generally positive, with noticeable peaks in the second quarter, buttressing an expected rise in warehousing needs.
Sentiment last year compared to the previous year suggested a more dynamic environment in terms of growth in volumes, but higher costs posed challenges.
For the first month of this year, Ti Insight states that warehousing sentiment suggests a “mixed but generally positive outlook for volumes, costs, and demand.”
Volume sentiment was still strong last month, though growth was slightly lower compared to end-2024.
Overall, January 2025 started on a positive note for warehouse activity, but rising costs and fluctuating demand may need closer monitoring in the near term, said Ti Insight.
READ: Global contract logistics market to grow by 4.2% this year
