Logistics & Industrial Capital Markets 2024 Outlook Report

2024 Outlook

RBA to pivot in H2 2024, and rate cuts appear likely

Economic growth to slow to 1.2% in 2024

Inflation has come off its peak and will continue to moderate in 2024, albeit the full impact of higher interest rates is yet to wash through the economy. The cash rate is widely viewed to be at its peak, and there is scope for the RBA to pivot to interest rate cuts in the second half of 2024, which will provide relief to household balance sheets.

Economic growth in 2023 proved resilient; however, the outlook for 2024 is contingent on consumer spending, given mounting cost of living pressures. A slow and soft landing for the Australian economy in 2024 remains the baseline scenario, and growth of 1.2% is expected for the year.

High rates of population growth to continue

Outperformance of non-discretionary retail to remain

Population growth continues to underpin the economy, and this will remain the case in 2024. The Federal Government, as part of its Migration Strategy released in late 2023, announced tweaks to the migration system, shifting the composition of migration from students towards workers. Notwithstanding this, population growth in 2024 is forecast to total 1.8% and will continue to support warehouse demand.

Consumers have shifted to non-discretionary retail items in the current environment, and this has led to the outperformance of food retail. This theme will remain in play in 2024 and will generate strong demand for cold storage warehouse space as approximately 40% of goods stocked at supermarkets require cold storage provisions.

1 | CUSHMAN & WAKEFIELD | LOGISTICS & INDUSTRIAL