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WALKER, Mich. (Tribune News Service) — The overall financial squeeze of the coronavirus pandemic is likely to have a long-lasting impact on Michigan’s economy, but that doesn’t mean some business segments aren’t already back and thriving.
There’s pent up demand in sectors like construction. And spending shifts, influenced by social distancing or pandemic concerns, have unexpectedly increased demand in various products and activities.
These are 10 industries that are seeing an uptick in sales, even as the economy struggles to bounce back:
Recreational marijuana arrived in Michigan on Dec. 1 and has continued its ascent, even amid a coronavirus shutdown that led retailers to find unique new ways to serve customers, including through curbside pickup and expanded delivery.
Recreational sales have increased an average of 32% each month tracking back to March. And in July, for the first time ever, recreational sales surpassed medical marijuana in total sales with $57.4 million versus $52.1 million for medical. The medical and recreational markets combined for a total of nearly $110 million in July sales. The number of licensed recreational marijuana stores ballooned from 82 in March to 148 in July.
There are prospects for even more exponential growth beginning in November if the state removes an existing prerequisite that any recreational marijuana license holder also possess a medical marijuana license. with the prospects of even more exponential future growth
The industry is projected to account for nearly $1.5 billion sales over the next year, according to Marijuana Regulatory Agency Director Andrew Brisbo.
Stores that remained open selling beer, wine or liquor throughout the ongoing pandemic not only survived but thrived, according to accounts store owners have shared with MLive and statewide data.
Tony Batou, who owns and operates the Wine Garden at 22425 Harper Ave. in St. Clair Shores, and Jeff Oppermann, the 25-year-owner of Oppermann’s Cork’n’Ale in Saginaw Township, both say sales have jumped nearly 40% compared to the prior year in recent months.
While many Michigan residents were laid off or working from home, some earning more while unemployed than when working due the $600-per-week federal unemployment stimulus checks that ran out in July, alcoholic beverage consumption surged. In addition to extra stimulus money, there were fewer options, since bars and restaurants have beenPeople dabbled with new cocktails concoctions and spent more on upscale liquor, especially anejo tequila.
“Spirit sales, wine sales, beer sales they have all absolutely reached new heights, as far as everyday purchasing goes and then sort of maintained that level,” Dominic Aprea, the owner of Tippins Market in Ann Arbor, told MLive. “I think a lot of that is just that everyday consumption has gone up. There’s not a lot of traveling going on, people are working remotely from home and teaching from home.
Construction jobs and business have bounced back faster than those in any other Michigan industry. According to the Bureau of Labor Statistics, the construction industry had nearly 43% fewer jobs in April of this year than it did 2019. Nearly 100,000 jobs were lost, predominantly due to the coronavirus shutdown.
Gov. Gretchen Whitmer authorized the reopening of the construction sector on May 7.
Kalamazoo-based Michael Horrigan, president of the W.E. Upjohn Institute for Economic Research, said industries such as construction were able to rebound more quickly because they have work environments that make social distancing and implementing safety precautions more conducive. He also said there was a bottleneck that created a need for quick expansion in order to keep up with demand when job sites reopened.
“Everybody was shut down for months,” said Brian Keeler, the vice president of pre-construction with Saginaw-based Spence Brothers. “What we saw coming out of that was everybody was behind and loaded up to the point where they couldn’t handle everything, so there was a tremendous amount of speed coming out of that.”
Keeler said some small contractors also took on more jobs to utilize federal Paycheck Protection Program loans designated to be spent on payroll within a certain time frame.
Since the initial rush, some larger commercial projects have been postponed due to economic uncertainty, Keller said. While he expects available work to “level back out,” he doesn’t expect the industry to experience layoffs any time soon.
“There’s still enough work to go around,” Keeler said.
With extended free time spent at home, Michigan residents are investing more money in at-home recreation, especially pools with a starting price near $50,000, installers tell MLive.
Paul Douglas, vice president of Flint-based Blue Hawaiian Pools of Michigan, said customers are trying to create their own “backyard paradises” since “stay-cations” are on the rise.
“They’re not only spending on pools, but elegant pools, landscaping, fencing, concrete work,” he said. “Thankfully we’re one of those businesses that is thriving during this time.”
Douglas said some install companies are already fully booked with jobs slated for 2021.
Greg Lamson, a co-owner of Birch-Run-based Palazzo Pools said he receives dozens of calls from potential customers each week and his company was booked early through the 2020 installation season.
“People aren’t traveling for vacations and also a lot of people are putting their stimulus money toward these pools,” he said. “It’s been so busy that the industry itself has had shortages in ever aspect of building pools, from fiberglass shells to vinyl liners, to pumps, heaters, it’s just really been something.”
While Michigan real estate sales are down about 21% on the year, agents say purchases boomed after industry reopened May 7 and they expect July sales to meet or surpass monthly totals for last year. The Michigan Realtors association has yet to release July sales data.
Sales prices are also on the rise, up 6% for the year and nearly 7% in June, indicating demand is strong in what agents are calling a sellers’ market.
Darin McLeskey of Saline, who owns Denovo Real Estate in Detroit, said he expected a lull when the real estate market reopened, but “it’s actually been a little bit of the opposite.”
He compared the recent economic shutdown to an “induced coma.”
“Your body needs to rest, and the coronavirus kind of forced that,” McLeskey said. “It kind of forced what would happen in a recession to happen all at once … and then the feds just slammed so much money at everything and started buying so much debt.
“It’s like, let’s put this patient in a coma and then wake them up and put them on — I don’t know — cocaine.”
With the coronavirus still posing a threat, the Michigan outdoors is one of the best places to maintain social distancing while enjoying the state’s beauty.
Retailers of camping, fishing and outdoor sports equipment, such as kayaks, are reporting increased sales in recent months. According the DNR, more new anglers and hunters are applying for licenses that have in recent years and campgrounds remain busy across the state.
The number of new hunting license customers in the state through July increases 120% compared to the same time frame in 2019. The number of new fishing license customers this year has increased nearly 40%, according to the latest DNR data.
After the shutdown, “we saw that immediate move to people engaging in the outdoor activities because they could have social distancing and entertainment,” said Jay’s Sporting Goods President Jeff Poet, who’s company operates in Clare and Gaylord. “We were sold out of kayaks quite early, that was one of the first sports that seemed to be very noticeable.”
He estimates 2020 sales are between 20% and 30% higher than they were in 2019.
It’s not just extra stimulus money that’s helped prop up sporting goods sales. said Tom Knutson, co-owner of Knutson’s Sporting Goods in Brooklyn.
“Our business succeeds when people have time,” he said. “They either have time and no money, or money and no time. That’s kind of how it works …
“It was the first time in our industry where there was time and money.”
RVs and motorhomes
Family road trips across the Michigan or the nation to campgrounds, state or national parks are taking the place of now-cancelled trips to Disneyland or or resort destinations, RV and motorhome dealers say.
Some are now using reallocated vacation funds or extra stimulus money to make down payments on new motorhomes and travel trailers, said Bill Sheffer, director of the Michigan Association of Recreation Vehicles and Campgrounds.
“The ability to to travel with your family in a controlled environment” is attractive in times like these, Sheffer said, “There’s no better social distancing than a campground where the sites are spread apart.”
He said June sales of motorhomes increased 28% compared to 2019. Travel trailers sales were up 50%.
“They can’t make them fast enough,” said Tom Nemacheck, Executive director of the Upper Peninsula Travel and Recreation Association . “People are buying $100,000 RVs that never owned one.”
Time at home and extra money are two of the biggest factors Dave Wohlfeil, owner of Wohlfeil Ace Hardware in Saginaw Township, attributes to the nearly 25% increase in sales his store has experienced throughout the pandemic.
Home improvement and hardware stores were deemed “essential” businesses under Gov. Gretchen Whitmer’s stay-home orders and allowed to remain open.
Everything from tools, to rototillers and wheelbarrows have been in high demand, and “our sales our off the charts,” Wohlfeil said. “A lot of people were staying home so they were buying merchandise. They were out doing yard work, home improvement and it created a lot of extra business.”
Wohlfeil said it’s created an industry-wide supply shortage for many tools, patio furniture and yard-care products, although demand seems to be tapering off to normal levels.
The home improvement goods spike holds true for the publicly traded retailers, also.
Home Depot and Lowe’s both reported huge sales increases throughout the coroanvirus pandemic. Home Depot sales at $38.1 billion during the second quarter were up 23.4% compared to the same 2019 period. Lowe’s reported $27.3 billion in sales between April and July, compared to $21.0 billion during the same time frame in 2019, and increase of 34.2%.
Many Michigan golf courses are typically at capacity on Father’s Day. “And that’s the way it’s been for us all summer long,” Sycamore Hills Golf Club President Tom Schwark says. “We’re almost booked solid every day.”
After a “frustrating” spring that saw Michigan courses closed amid favorable golfing weather from March 24 through April 24 due to Whitmer’s stay-home-stay-safe order, Schwark said golf courses reopened without golf carts, a restriction that lifted May 8, and have been bustling ever since.
Sycamore Hills Golf Club in Macomb County has experienced a nearly 25% increase in green fees through June and July with August keeping up the same pace. Schwark said the course broke 500 players in one day for this first time ever this summer, a feat that’s since been repeated nearly 15 times.
“We’re seeing a lot of young people, 20- and 30-year-olds, families, kids,” he said. “Golf is perceived as a being safe for social distancing and people are starting to discover the pleasures of golf.”
Jada Paisley, director of the Michigan Golf Course Association, said courses around the state are experiencing similar greens fee surges. And it’s a good thing, she said. Since many lost significant chunks of their income due to lost wedding, banquet, bar and restaurant revenues, the increase golf tee revenue is helping them to “survive.”
Michigan has the most public golf courses in the nation and the sport has a “$4.2 billion impact on Michigan’s economy annually,” according to Gov. Gretchen Whitmer’s office.
“Being on a golf course is, you know, it’s beautiful, it’s interesting, it’s relaxing,” Schwark said. “Sometimes the game can be frustrating. If you’re not having the best day, just enjoy the scenery.”
When the NBA first postponed its season due to COVID-19, ESPN aired live video of players competing against one another in the NBA2K video game. Nearly 900,000 viewers watch NASCAR drivers race against one another in real time over the ultra-realistic iRacing Series.
Amid a quarantine, the technology of today’s video games, with their realism, creativity and the ability they offer for socialization and competition in real time, have made them more popular than ever.
Entertainment Software Association President and CEO Stanley Pierre-Louis called video game industry “one of the few bright spots in out economy” through the coronavirus pandemic.
He cited a 9% increase in sales through the first three months of 2020.
“Those numbers have soared in recent months with spending up 73% in April and up 52% in May compared to those same month last year,” Pierre-Louis said on July 14 at the Games for Change virtual conference.
Scott Brodie, who owns Heart-Shaped Games, an independent developer based in Ann Arbor, said the entire industry has experienced a “significant increase in sales ever since the stay-at-home rules went into effect.”
“People have more time, in theory, to play, so it seems like people are spending more on entertainment at home,” Brodie said.
His company is preparing to release its “We are the Caretakers” game this fall, which revolves around combating poachers to protect endangered animals in a sci-fi world.
“We’re very excited about the fact that we can keep everyone employed,” Brodie said, “and when we do put out next game out we’ll probably have a much larger audience.”
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