A Cushman & Wakefield Research Publication - 2017 Global Forecast

GLOBAL GDP GROWTH VS. NET ABSORPTION

programs, etc. In the U.S. the Federal Reserve (the Fed) does have a history of raising rates too quickly and a number of times in the past that has resulted in derailing growth. Yes, the list of downside risks remains long, but not uncomfortably so. Most of these threats are slow moving, sitting on the tails of normal probability curves. The consensus of most economists is that the probability that the economic expansion will continue at least for the next 6-12 months hovers in the 80% range. Moreover, most central banks around the globe are maintaining an aggressive stance with respect to monetary policy. In the U.S., the Fed has slowly begun to raise rates, and it is now hinting at unwinding its balance sheet. Still, the fed funds target rate is in the 1% to 1.25% range—well below the normalized rate and, therefore, highly supportive of near-term growth. In many other countries—including Switzerland, Japan and Germany— short- and long-term rates are closer to 0% than to 1%. From a real estate perspective, the combination of an accelerating global economy and low interest rates is a recipe for healthy office market conditions.

-1% 0% 1% 2% 3% 4% 5% 6%

-100 -50 0 50 100 150 200 250

02

2012

2018

2016

2014

2010

2020

2008

2006

GDP (% Yr/Yr, LHS)

Global Net Absorption (MSF, RHS)

Source: IMF, Cushman & Wakefield Research

cushmanwakefield.com / 7