If you live in Traverse City, you know housing is at the crux of many of the area’s biggest conversations right now: How to get more of it; how to reduce the amount of money it costs; how to leverage it as a means of solving local problems.

But the construction industry is facing its own headwinds. What is the state of the construction industry in Michigan – and locally – and what do the tea leaves say about the future? We let the numbers do the talking.

INVENTORY AND HOUSING PRODUCTION

19,703: Total housing units built in Michigan in 2023, according to the U.S. Census Bureau. That number is down 10.7% from 2022 (21,983) and is actually even lower than the core pandemic years of 2021 (21,732) and 2019 (19,735).

13,856: Single-family housing permits issued in Michigan in 2023, down 8% compared to the more than 15,000 issued in 2022.

25,000: According to the Home Builders Association of Michigan (HBA), the number of new homes that most economists believe a state the size of Michigan should be building (annually) just to keep up with population shifts and the loss of aging housing stock. The last time the state hit that level of housing production in one year? 2006. Per the HBAM, Michigan has built an average of 13,000 homes per year since then.

711: The number of residential building permits issued in Grand Traverse County in 2022, the most recent year for which Census Bureau data is available. The good news? That number is up more than 28% from 2021, and marked the county’s biggest year for housing production since 2006. The bad news? Back in 2005, Grand Traverse County tallied 1,163 building permits in a single year – more than 2021 and 2022 combined.

$502,697: The average sale price of a home in Grand Traverse County in 2023 – a record high, up 7.65% from the previous year’s then-historic high of $466,940. That trend, of higher and higher home prices, is a nationwide issue. According to the HBAM, national home prices are now 70% higher than their last peak during the housing boom in March 2006.

2,538: The total number of homes sold in Grand Traverse County last year, down from 2,771 the previous year. From 2019 to 2021, sales volume was significantly higher – ranging from 3,370 to 3,455 homes per year – indicating the fast-dwindling inventory in the northern Michigan market.

COSTS AND OVERHEAD

1.6: The across-the-board percentage increase tracked in Producer Price Index (PPI) between February 2023 and February 2024*. (PPI is defined by the U.S. Department of Labor as “a family of indexes that measures the average change over time in the selling prices received by domestic producers of goods and services.”)

The construction industry, over the past year, has seen notable PPI increases in a slew of key building supplies, materials, and expenses including:

Paving mixtures, up 1.4%
Concrete products, up 6.6%
Cement, up 6.5%
Insulation, up 3.3%
Steel mill products, up 5%
Sheet metal products, up 2.2%
Fabricated structural metal, up 2.4%
Prefab metal buildings, up 7.3%
Construction machinery and equipment, up 4.3%
Wages and salaries, up 4.5%
Total compensation, up 4.2%
Of course, there have been a few PPI declines relevant to the construction world as well, such as:

Diesel fuel, down 11.2%
Plastic construction products, down 2%
Flat glass, down 1.1%
Lumber/plywood, down 4.8%
*All PPI data presented here come from the latest report by Associated General Contractors of America (AGC).

LABOR AND JOBS

8 million: Based on Bureau of Labor Statistics (BLS) data, the number of people employed in the U.S. construction industry during 2023 – give or take 100,000 in seasonal fluctuations. That’s the country’s highest level of construction employment from any point in the past 10 years. For comparison, industry-wide employment was 6 million in early 2014, just 10 years ago.

6.5 million: The low point of construction employment in the U.S. during the COVID-19 pandemic, in terms of monthly data. Pre-pandemic, construction employment was around 7.6 million. It dipped to 6.5 million in April 2020, but bounced back quickly, increasing in every subsequent month for the following year. The baseline had rebounded to approximately 7.6 million people working in construction by early 2022, and it has since far outstripped pre-pandemic levels.

8,162,000: The number of people employed in construction nationwide as of February 2024, the most recent month for which BLS data is available. That’s up from 7,947,000 for the same month last year.

407,000: The number of job openings in the U.S. construction industry as of January 2024.

114,900: The BLS’s projected job growth for construction between 2022 and 2032.

316,000: The number of people in Michigan employed by the construction industry, according to the state’s Department of Technology, Management & Budget.

50.4: The percentage growth Michigan saw in construction employment between 2011 and 2021, significantly outpacing the 7.4% increase in statewide employment.

To hear local perspective on construction and these statistics, read more at tcbusinessnews.com.