In the first quarter, US economic growth rebounded from the near zero rate delivered in the fourth quarter.
Fears that the fragile expansion could falter eased as a more widespread recovery in the housing market, slow but steady job gains, and a buoyant equity market outweighed restrictive fiscal policy in the last few months.
On balance, we expect that the economy will continue its modest pace of expansion through the rest of 2013 as stronger consumer confidence weighs against intensifying fiscal headwinds over the coming months.
Exhibit 1 shows the significant change in inventory contribution to GDP growth from the negative level in the fourth quarter.
Economic and labor gains are supporting demand for commercial and multifamily real estate.
All property sectors are nearing the end of a historic lull in construction and the growth in demand for new product is encouraging a steady stream of new supply.
The timing and intensity of the new supply delivery is dependent on property type. While apartment construction is expect to exceed the long-term average in 2013, industrial, office and retail construction are anticipated to be approximately 30% of long-term averages, still more than double 2011 deliveries.
Source : UBS AG