This week we look at the relationship between industrial take-up and online sales. The top chart shows industrial take-up in million sq ft and internet sales as a percentage of all retail sales over time.
Both measures have trended upwards since the global financial crisis and we expect both measures to be close to their individual records achieved in 2020. The bottom chart analyses the same data, but looks at the correlation between the two. Each point on the chart illustrates one observation (one year).
The dotted line represents the trend line and the R2 provides information about the correlation between the two. R2 can take values between 0 and 1. A value of 0.87 therefore illustrates a strong correlation between the two.
We’ve all been hearing about a couple of phenomena over the past few months. Firstly, online sales have surged which does not come a surprise given how various lockdowns have changed or accelerated changes in consumer behaviour.
Secondly, industrial take-up has reached a record high last year and is on course to exceed 40m sq ft for the second year running. The unprecedented increase in demand for I&L space is driven by this unprecedented increase in online sales.
While both developments are no news, this week we visualise the relationship between the two.