Sequestration and its $85 billion in federal budget cuts planned for this year will bring significant challenges on the U.S. economy and the commercial real estate recovery. According to the National Real Estate Investor, the forced reductions that began March 1st will have real consequences for the U.S. economy, including eliminated and reduced government contracts, reduced private and public sector jobs and furloughed workers.
The region that will take the biggest hit is obviously the nation’s capital and surrounding states. The District of Columbia, Maryland and Virginia, all of which report 19.8% of economic activity tied to federal spending mainly due to a high concentration of government agencies and federal contractors, are all prime targets for cuts. Hawaii (15.8% federal spending), Alaska (13.3% federal spending) and Kentucky (9.9% federal spending) are also states that will experience difficult times this year.
To read the full article from the National Real Estate Investor, click here.