Mack McMaster works on the Lincoln Park Lofts in Lincoln Park in November. In the report by the Associated General Contractors of America, 100 percent of Michigan companies surveyed said they plan to add five or fewer employees this year; none had plans for any layoffs. (David Coates / The Detroit News)
A rebounding auto industry, expanding health care systems and a surge of private investment in Detroit should mean growth in Metro Detroit’s struggling construction industry, local and national experts said.
In a national survey released Tuesday, Michigan construction companies said they plan to hire more workers in 2014 as a larger number of commercial construction projects come on line in Wayne, Oakland and Macomb counties. Optimism in the Great Lakes State mirrors the outlook for job growth in the building industry nationwide, according to the report by the Associated General Contractors of America.
“What we’re seeing, on the part of developers who seem to all have gone away in 2008, is a bit of a resurgence in privately financed projects,” said Vince DeLeonardis, president of Pontiac-based George Auch Construction Co. “The thought would be that there’s a lot of pent-up demand.”
In the report — which doesn’t account for residential construction — 100 percent of Michigan companies surveyed said they plan to add up to five employees this year; none had layoff plans.
Nationwide, 86 percent of the firms surveyed planned to hire 25 or fewer employees this year. Among the companies that maintained staffing levels last year, 41 percent plan to add to their payrolls in 2014. Only 2 percent planned layoffs.
“Contractors are more optimistic about 2014 than they have been in a long time,” Stephen E. Sandherr, the association’s CEO, said in a statement. “While the industry has a long way to go before it returns to the employment and activity levels it experienced in the middle of the last decade, conditions are heading in the right direction.”
Michigan’s construction industry is seeing upticks in construction for manufacturing, education, private office, and power and utility projects.
Auto growth spins off
DeLeonardis said his company, which has a staff of 87, saw a 15 percent increase in revenue in 2013. He said the rebounding auto industry has helped spur construction in a number of sectors.
“We’re seeing it not only with the Big 3, but with the second- and third-tier suppliers,” he said. “That also filters down into some of that commercial construction: redevelopment of abandoned auto manufacturing sites by film studios to research development companies.”
Some major projects include: the Northville Health Center, a 100,000-square-foot mixed-use health facility for the University of Michigan; a $129 million St. Joseph Mercy Oakland patient tower in Bloomfield Township; and the M-1 Light Rail in Detroit, which should spur additional development.
And although the contractors’ association study doesn’t include residential construction, some contractors said housing projects are increasing, too.
Tim O’Brien, president of Troy-based O’Brien Construction Co., said he’s seen a large number of multi-family projects in Detroit as well as nearby cities such as Pontiac and Lincoln Park.
“We’ve seen quite a few jobs come out just in the last 20 days,” he said. “People seem sort of cautiously optimistic.”
In Michigan, 24 percent of the companies in the survey reported having a hard time filling key professional and craft worker positions. Thirty-seven percent believe the industry will start to grow this year. The optimistic outlook comes after a down year for Michigan construction.
In December, the contractors’ group reported the number of construction jobs reached its highest level since 2009, but Metro Detroit didn’t share in that same recovery.
As of October, the Detroit-Dearborn-Livonia area had 1,300 fewer construction jobs than it did 12 months earlier, according to the most recent data from the U.S. Department of Labor Statistics. That part of the Metro region has consistently lost jobs over the past year, something national and local experts say is a concern.
Nationwide, the construction industry still employs 1.9 million fewer people than it did in 2006, although employment did increase nationwide by more than 2 percent last year.
But this year should be better, DeLeonardis said, and all the new projects are proof.
“We were all thinking those would be better years, and they were, but the auto industry and all the suppliers weren’t doing much, and major health care providers weren’t doing much,” he said. “Now, the thought is there’s a lot of pent up demand.”