JLL Office Property clock Q3 2021

The third quarter saw two occurrences of decoupling accelerate. Firstly, thanks to the success of mass vaccination programmes, the emergence and spread of the Delta-variant resulted in a significant rise in case numbers. Still, commensurate increases did not match these in hospitalisations and deaths. This allowed policymakers to break the cycle of tightening restrictions and imposing lockdowns with each new wave of the pandemic. Secondly, confidence in the coronavirus situation – which deteriorated with the spread of the delta-variant – no longer determined consumer and business confidence more broadly, both of which exceeded and stabilised at above pre-pandemic levels. Deeds followed words, and consumer and business behaviour made considerable strides back to normality: travel, commuting, and the return to offices continued to recover, and recruitment activity mushroomed. However, the pace of normalisation was not uniform, neither across countries, across different urban conurbations, nor across sectors. Close-contact services, such as hotels, hospitality, and air travel, saw activity remain subdued, still subject to a patchwork of international rules on quarantine and travel. As economic activity resumed in earnest, supply chain and capacity constraints began to bite from still-disrupted production activity. Commodity prices continued to climb, shortages emerged, and inflation spiked. Most upward inflation pressure is expected to dissipate as short-term disruption is resolved but remains uncertain, especially as policy stimulus fades and pandemic support unwinds.