Over recent years, increasing attention has been paid to the logistics segment of the real estate market. While this has been a growing segment, a recent report by broker JLL points to the possible problems to be faced by logistics operators in terms of labour.
JLL says that the supply of labour has become a key challenge for companies in many logistics markets because the demand for warehouse workers, and drivers, has continued to grow while many of Europe’s major economies have very high
levels of employment and economic activity, and low levels of unemployment and economic inactivity. Across Europe, JLL estimates that more than 300,000 new warehouse jobs have been created over the past three years, before taking account of any displacement effects.
This estimate is based on the level of new warehouse completions, and the application of an employment density of 1 job per 100 sq m to the newly completed and occupied stock. As for wider labour market conditions, data from
Eurostat highlight high levels of employment and low unemployment in many countries across the European Union. For the EU as a whole the employment rate in 2017 was 73.4%, the highest annual level since 2008, and the unemployment rate was 4.9%, the lowest level since 2009.
Forecasts indicate that the current shortage of labour will worsen in many countries because ageing populations will result in a contraction in the population of working age. To add to this, e-commerce, which is one of the drivers of demand, is also leading to more labour intensive warehouses than average, because e-fulfilment facilities often operate 24/7 and involve item picking and packing (and or labour-intensive returns processing). A global study by Wordplay, says JLL, indicates strong e-commerce growth in major European markets over the five years 2017-2021.