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Transitional Trends Point To Recovery

In looking forward to what Michigan's construction industry economic picture will look like in 2008, we need to analyze the new trends that developed in our region in 2007 — an extremely difficult transition year. Before we begin to look at those transitional trends that will offer the most potential for Michigan's battered economy, we need to understand the traditional developmental patt...

January 07, 2008

In looking forward to what Michigan's construction industry economic picture will look like in 2008, we need to analyze the new trends that developed in our region in 2007 — an extremely difficult transition year.

Before we begin to look at those transitional trends that will offer the most potential for Michigan's battered economy, we need to understand the traditional developmental patterns and our economic history.

Prior to 2007, the economic paradigm was that when residential construction entered a recessionary period, commercial and retail construction followed in a free-fall. This has not been the case in 2007.

For years, major national retailers and commercial enterprises seemed to avoid Michigan like the plague. Now, all of this is changing and the situation now offers some rays of hope for our state's construction industry.

Driving this significant "sea change" are several transitional developmental themes. They are as follows:

Developmental Transitional Themes

  • Accelerating gasoline prices, sustainability and pedestrian access.
  • Highly concentrated retail-commercial development localization.
  • Retail-commercial revolution.
  • Growing utilization of demographic and psychographic data to identify socio-economic concentrations of people and businesses.
  • Readjusting lifestyles due to Michigan's economic downturn.

Observations

Economic forecasting should not be limited to just a crunching of dry numbers that are for the most part national, or numbers imposed on the local situation. In my 30 years of preparing economic forecasts, "observations" on the ground are increasingly becoming more reliable. Forecasts or outlooks should be based on what is observable and actually happening.

The aforementioned new developmental traditional trends have taken a significant hold here in Michigan. For example:

  • Pedestrian access and retailing go hand in hand at the new lifestyle mall at Partridge Creek in Clinton Township. A similar outdoor lifestyle mall was developed in Rochester Hills. The proposed development at the old Kmart headquarters in Troy appears to have large-scale pedestrian access features.
  • Existing major roadway intersections in areas that have high concentrations of desirable demographics, such as the large-scale development occurring in the Square Lake and Telegraph Road area in Oakland County, at Interstate 94 and Hall Road in Macomb County, and the Grand River-M-59 area in Livingston County.

As the population in Michigan becomes more aged, as younger families become more strapped for disposable income due to increasingly high gasoline and transportation costs, there will be a growing need for retailing and commercial services that are localized, highly pedestrian friendly and drivable.

Structures providing space for retail consumer goods, health and medical services, nursing and assisted living, food franchising, hardware and remodeling, self-storage, and entertainment uses will be in growing demand in Michigan in 2008 and merit considerable attention by construction industry business development and marketing professionals.

In closing, in a young and growing America, the cry was "go west." For Michigan's construction industry in 2008, it's "go retailing and commercial!"


Author Information
Joe Neussendorfer is the president of U.S Construction Research and Construction Answer Man Services (www.constructionanswerman.info). He has over 30 years of experience preparing construction industry forecasts for the private and public sectors. He is a life member of the Detroit Economic Club, past president of the Masonry Institute of Michigan, past executive director of the Mason Contractors Association, past director of Communications and Public Relations for the Construction Association of Michigan, and former Communications and Public Relations director for a national general contractors' organization.

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