America's warehouse shortage

The AI boom has a warehouse problem. Ross Perot Jr., the billionaire chairman of Texas developer Hillwood, said Tuesday that the U.S. has only 15 or 20 empty million-square-foot warehouses suited to assembling AI data center equipment.

"The AI supply chain is staggering and it's like every AI supplier needs a million square feet," Perot said. Companies were building data centers at a pace of roughly $85 billion a year in August, up 73% from a year earlier, according to the Census Bureau.

Only 5.4% of the biggest high-end warehouses stood empty last quarter, down from 9.5% a year earlier, real estate firm JLL said. Warehouse leasing had its best quarter since 2022, and JLL tied some of it to data center suppliers.

Data centers have also become a midterm election issue as critics point to the power and water they use and their air and noise pollution. "No one said a word until about six months ago," Perot said. He said builders should do more to show towns what they'd gain, including tax revenue.

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Americans are feeling better about the economy for the first time in four months. The Conference Board's consumer confidence index rose 7.5 points to 91.7 in October, back to where it stood in June. In September, the index had fallen to its lowest level since 2014.

Consumers felt better about business conditions both now and in the months ahead, said Fergus McCormick, the Conference Board's senior economist for global indicators. He said the rebound came as gas prices eased from September to October. More people also said jobs were plentiful.

On average, consumers still expect prices to rise 5.8% over the next year. That's lower than in September but still high. Consumers remain frustrated over the cost of groceries, oil, and diesel.

Confidence is still on a long-term downward trend. McCormick said consumers plan to cut back on services and big-ticket purchases over the next six months and that high prices and lingering inflation have probably squeezed their budgets.

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