Latest news with #REVIVERegionalVibrancyIndex

Business Journals

Federal cuts hitting D.C. suburbs hardest, data says

Story Highlights Trump administration's federal cuts severely impact Greater Washington's economy. Suburbs hit hardest, with steep drops in employment and contracts. CBRE's REVIVE index shows second-worst economic start since 2009. The Trump administration's efforts to slash federal spending through mass firings and buyouts of federal workers and cancellation of scores of federal contracts are finally starting to take their toll on Greater Washington's economy. New data from the real estate firm CBRE showed that the first of half of 2025 was the second-worst start to the year for Greater Washington's economy going back to 2009, eclipsed only by the first year of the pandemic. GET TO KNOW YOUR CITY Find Local Events Near You Connect with a community of local professionals. Explore All Events Notably, the suburbs have been it the hardest, said Ian Anderson, CBRE's senior director of research and analysis. Northern Virginia has seen the steepest drop in federal employment while federal government contracts and grants procured in suburban Maryland fell more than twice as fast in the first six months of 2025 than other parts of the region, according to CBRE's REVIVE Regional Vibrancy Index, a monthly index tracking the health of the local economy. At the end of June, the index stood at 72.4 out of 100, down 1.1% from the prior month and 5% since the start of the year. Only in the first half of 2020 did it show a bigger drop in the region's economic vitality. CBRE (NYSE: CBRE) and the Washington Business Journal began partnering to produce the monthly index in early 2024, tracking changes to the region's economy following the pandemic. The index lags by more than a month and tracks thousands of data points on dozens of industries and condenses those into major areas: labor, innovation, commercial real estate, residential real estate, mobility and visitation, the federal government and investor sentiment. Revised job numbers and additional monthly data have begun to filter in and make clear that the local economy took a turn for the worse in the first two quarters, Anderson said. In previous months, the impact of federal cuts on the economy looked to be more modest and didn't meaningfully drag down the REVIVE index, which had been buoyed strong investor sentiment and rising mobility and visitation scores Now, however, 'that negativity we know about is starting to become clearer in the data,' Anderson said. The region shed roughly 20,000 federal government jobs in Greater Washington so far this year while federal government contracts and grants procured by companies in the region fell by $1.7 billion or 13% since the start of the year, according to CBRE's research. A rise in the region's unemployment rate to 4% in June from 3.3% a year earlier led REVIVE's labor sub-index to fall 2.4% year-over-year in the most recent report. This month, the D.C. real estate firm has added a new index tied specifically to the District. Indices for Northern Virginia and suburban Maryland are forthcoming, as CBRE aims to make its research 'more applicable to stakeholders and players in each of those geographies,' Anderson said. And there are variances between the sub-areas. For example, federal government employment fell by 6.1% in Northern Virginia, 4.1% in suburban Maryland but just 2.4% in D.C. between December and May. Anderson speculated that cuts were more severe in the suburbs because that's where much of the federal job growth has been in recent decades. The Maryland suburbs saw a whopping 31.4% drop in federal government contracts and grants procured from December to June, compared to a 13% drop in Northern Virginia and 12% drop in D.C., the index found. Cuts to the Department of Health and Human Services have disproportionately affected suburban Maryland, which is home to some of HHS' biggest agencies, including the Food and Administration and the National Institutes of Health. NIH has been hit particularly hard by cuts in federal grants. A bright spot in the data was the mobility and visitation sub-index, which was up 43% year-over-year in June. Average daily tapped entries on Metro were 22% higher in June compared to the same month last year, according to data from the Washington Metropolitan Area Transit Authority. The sub-index also tracks anonymized cell phone data, which also showed more people moving around the region than during the same time last year. The D.C. index's street activation metric also takes into account a 12-month rolling average of crime in D.C., which was down 18% through June, Anderson said. Such numbers run counter to President Trump's claims that crime is up in D.C., allegations he this week in announcing that the federal government would be temporarily taking control of D.C.'s police force and deploying the National Guard in D.C. Another bright spot is the apartment rental market. The second quarter of 2025 was the 'ninth-best quarter over the last ten years' in the apartment rental market in Greater Washington, Anderson said, based on median rental rates. The median asking rent in Greater Washington was $2,125 in June, according to data from Zillow, an increase of 1.5% from June of last year. That could be a sign, Anderson said, that even residents who've lost, or are in danger of losing, their jobs are confident that they'll be able to find new ones. 'It appears that is one positive thread underlying a lot of this negative,' he said.