Traverse City Record-Eagle

November 12, 2013

Economy still building momentum

BY DOUG LUCIANI
President - Traverse City Area Chamber of Commerce

---- — TRAVERSE CITY — There’s often a fine line between optimism and realism, not unlike the shades between a realist and a pessimist.

So how would a realist assess Northern Michigan’s economy these days? Is it a cloudy future because of a slower than hoped for recovery from the Great Recession, hyper-partisanship among lawmakers or having our state’s largest city adrift in bankruptcy? Or are there rays of sunshine on Michigan’s economic horizon?

A pessimist can certainly point to those factors and others as cause for concern.

But here in Northwest Michigan, even the most-grounded realist can be optimistic about the weeks, months and years ahead. There are numerous local economic indicators trending in the right direction, including:

n Improving jobless numbers. The August unemployment rate for the 10-county region stood at 8.4 percent. That’s about the same as a year ago and higher than we’d like to see. But there were 1,200 more people working in the 10-county region compared to 2012 according to state data, which shows growth in the regional job market. Grand Traverse County’s jobless rate in late summer was 6.8 percent.

n A significant rebound in 2013 in the region’s construction sector. According to Grand Traverse County’s Construction Code office, more than $90 million in new construction has taken place through the first three quarters of 2013 – figures that don’t include Garfield Township, which has its own code office. The $90 million-plus represents a whopping 79 percent increase from the same period in 2012. New construction within Traverse City through September 2013 totaled $36.7 million, almost triple the $14.8 million through the same period in 2012. The work ranges from new retail chains and restaurants to locally-owned shops and financial institutions. It creates jobs within those new businesses and restores jobs in the construction sector that suffered the most during the recession. Much of it is in-fill development that helps sustain our urban areas and minimizes the impact of suburban sprawl.

n Continued growth in the region’s tourism sector. A new study commissioned by Traverse City Tourism, the former Convention and Visitors Bureau, showed that the tourism sector generated nearly $1.2 billion in direct spending in 2012 and more than 12,000 jobs in the Traverse City area, about 30 percent of the region’s total. The data also showed a growth rate of 4.5 percent a year in the tourism sector since the previous study in 2006. For 2013, state-wide hotel occupancy is again setting records, and is strong in northern Michigan as well. The Pure Michigan tourism and business campaign continues to pay long dividends for the state and specifically for Northern Michigan.

n Surging home sales and resurgent real estate values. Through September, home sales in the five-county area totaled 2,177, an increase of more than 11 percent from the same period of 2012 and the highest level in a decade. Median home sale prices have rebounded to near pre-recession levels, and the vacation/second home market is coming back strong.

n Continued growth in airport traffic at Cherry Capital Airport. Passenger traffic for 2013 through August is up 3.6 percent from last year, totaling nearly 267,700 travelers, an increase of more than 9,000 travelers compared to a year ago.

n A renewed focus on economic development efforts at the local level. In recent months officials in communities like Kingsley, Kalkaska and Benzie County have stepped up to work with the Traverse Bay Economic Development Corp. to create strategies and steps to foster economic growth and job opportunities in their areas

The Chamber’s annual Business Expo and Economic Outlook breakfast is a tremendous opportunity for the region’s business sector to step back and assess where it’s been and where it’s headed. Just a couple of years ago, the mood was significantly dimmer as we wondered how far the stock market would fall, how low property values would drop and how high the unemployment rate would go. They were pessimistic times to be sure, but the realists were confident that the region had the foundation, ability and will to work through the tough times and create a community that’s stronger than it’s ever been.

That’s exactly what’s happening. While the economic recovery is tenuous and Michigan faces many challenges ahead, our region and state can continue to look to the Traverse City area as a leader and example to other communities on how to create a place where people want to live, work and raise their families.

And that’s keeping it real.