While activity among the real estate side of life science is going through a slow period, it is important to zoom out and examine the outlook of the sector in the long term. How is the need for lab space going to evolve over the next 10 years? One way to analyze the space needs is to observe the trend in employment. The chart below contains data from the Bureau of Labor Statistics (BLS) for the entire U.S. Keep in mind that this trend covers all scientific research and development, which includes other categories outside of life science, including physical sciences and engineering. In the chart you will see a clear shift starting around 2018, where employment started to grow at a rapid pace. From the 5-year period of 2018-2023, the number of jobs increased by about 35%. It was during this period that construction for new life sciences buildings also skyrocketed. The amount of new projects peaked at the start of 2023, with 43 million square feet starting construction over the prior year.
The BLS also puts out a 10-year projection for the sector, which is represented by the red dotted line. Employment is expected to reach 1,055,000 jobs in 2033, which is a 12.8% increase from 2023. Total employment for all industries is only expected to grow by 4% over the same period. The strength of the Scientific R&D sector will create solid demand for life science real estate going forward.
