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Minnehaha County – Building Permits 2023

Construction Word Cloud

Building permits serve as a critical indicator of economic health, reflecting trends in construction, real estate, and broader economic activity. Governments, investors, businesses, and policymakers closely monitor building permit statistics because they provide valuable insights into future economic growth, employment, investment patterns, and urban development. Understanding the economic impact of tracking these permits is essential for informed decision-making at both macro and microeconomic levels.

  1. Leading Indicator of Economic Growth Building permits are a leading economic indicator, meaning they signal future economic activity before it materializes. When permit approvals rise, it suggests that developers and homeowners are planning new construction projects, which will lead to increased spending on labor, materials, and services. This activity stimulates economic growth by:

    • Boosting GDP: Construction contributes significantly to Gross Domestic Product (GDP). Increased permits indicate upcoming investments in residential, commercial, and infrastructure projects, driving economic expansion.
    • Encouraging Multiplier Effects: Construction generates demand for related industries, including manufacturing (steel, cement, lumber), transportation, and professional services (architecture, engineering). Each dollar spent in construction circulates through the economy, creating additional economic value.


  2. Employment and Labor Market Effects The construction sector is a major employer, and building permit trends directly influence job creation. Monitoring permits helps predict labor demand in:

    • Direct Construction Jobs (e.g., carpenters, electricians, plumbers)
    • Indirect Jobs (e.g., suppliers, equipment manufacturers, logistics)
    • Induced Jobs (e.g., retail, food services, real estate agents)


    A decline in permits may signal upcoming layoffs, while an increase suggests hiring surges. Policymakers use this data to implement workforce training programs or adjust fiscal policies to support employment stability.

  3. Real Estate Market Stability Building permits provide insights into housing supply and affordability. Key impacts include:

    • Housing Supply & Prices: A surge in residential permits can alleviate housing shortages, stabilizing or reducing home prices. Conversely, a permit slowdown may indicate future price increases due to constrained supply.
    • Commercial & Industrial Development: Permit trends for offices, warehouses, and retail spaces reflect business confidence. Rising commercial permits suggest economic optimism, while declines may signal downturns.


  4. Government Revenue and Public Planning Local governments rely on building permits for:

    • Tax Revenue: Permit fees, property taxes, and sales taxes from construction activities fund public services (schools, roads, utilities).
    • Infrastructure Planning: Permit data helps municipalities plan for transportation, utilities, and zoning adjustments to accommodate growth.
    • Regulatory Adjustments: Monitoring permits allows governments to identify bottlenecks (e.g., excessive delays in approvals) that may hinder economic development.


  5. Investment and Financial Market Implications Investors and financial institutions analyze permit data to:

    • Guide Real Estate Investments: Developers and REITs (Real Estate Investment Trusts) use permit trends to identify high-growth regions.
    • Assess Credit Risk: Banks evaluate loan applications based on construction demand; rising permits may indicate lower risk in mortgage and commercial lending.
    • Predict Commodity Demand: Building material suppliers and futures traders monitor permits to anticipate demand for lumber, steel, and other inputs.


  6. Economic Policy and Risk Management Policymakers use permit statistics to:

    • Adjust Monetary Policy: Central banks may consider construction trends when setting interest rates to control inflation or stimulate growth.
    • Mitigate Bubbles & Crashes: Rapid increases in permits may signal overheating (e.g., housing bubbles), while prolonged declines could foreshadow recessions.


Conclusion

Monitoring building permit statistics is vital for anticipating economic trends, guiding investments, and shaping policy. These permits influence GDP growth, employment, real estate dynamics, government revenue, and financial markets. By analyzing permit data, stakeholders can make proactive decisions that enhance economic stability, promote sustainable development, and mitigate risks. Ignoring these indicators could lead to misallocated resources, housing crises, or missed growth opportunities-underscoring the importance of vigilant tracking in economic planning.

 
Quarter
      Total Units
      Single-Family Units
      All Multi-Family Units
2-unit
3 / 4-unit
5+ unit
     
1997 Q1 16  bar 14  bar 2  bar 200
Q2 93  bar 77  bar 16  bar 2410
Q3 96  bar 90  bar 6  bar 240
Q4 184  bar 168  bar 16  bar 646
 
1998 Q1 27  bar 23  bar 4  bar 040
Q2 131  bar 107  bar 24  bar 8016
Q3 134  bar 122  bar 12  bar 408
Q4 127  bar 127  bar 0  bar 000
 
1999 Q1 39  bar 35  bar 4  bar 400
Q2 174  bar 108  bar 66  bar 0066
Q3 128  bar 128  bar 0  bar 000
Q4 166  bar 112  bar 54  bar 21240
 
2000 Q1 140  bar 88  bar 52  bar 0052
Q2 125  bar 123  bar 2  bar 200
Q3 112  bar 103  bar 9  bar 405
Q4 189  bar 141  bar 48  bar 0048
 
2001 Q1 63  bar 59  bar 4  bar 400
Q2 240  bar 144  bar 96  bar 0888
Q3 338  bar 143  bar 195  bar 24189
Q4 227  bar 149  bar 78  bar 0870
 
2002 Q1 61  bar 61  bar 0  bar 000
Q2 185  bar 103  bar 82  bar 0478
Q3 130  bar 94  bar 36  bar 0432
Q4 194  bar 142  bar 52  bar 02824
 
2003 Q1 180  bar 47  bar 133  bar 00133
Q2 231  bar 195  bar 36  bar 4032
Q3 394  bar 223  bar 171  bar 08163
Q4 151  bar 151  bar 0  bar 000
 
2004 Q1 164  bar 55  bar 109  bar 08101
Q2 196  bar 188  bar 8  bar 080
Q3 232  bar 164  bar 68  bar 21254
Q4 191  bar 177  bar 14  bar 0014
 
2005 Q1 41  bar 37  bar 4  bar 040
Q2 220  bar 132  bar 88  bar 0484
Q3 150  bar 144  bar 6  bar 600
Q4 156  bar 126  bar 30  bar 2280
 
2006 Q1 80  bar 78  bar 2  bar 200
Q2 173  bar 163  bar 10  bar 280
Q3 126  bar 110  bar 16  bar 880
Q4 117  bar 101  bar 16  bar 4120
 
2007 Q1 126  bar 50  bar 76  bar 0076
Q2 236  bar 154  bar 82  bar 0874
Q3 122  bar 85  bar 37  bar 61615
Q4 157  bar 105  bar 52  bar 16432
 
2008 Q1 24  bar 16  bar 8  bar 440
Q2 191  bar 104  bar 87  bar 22857
Q3 218  bar 126  bar 92  bar 81272
Q4 140  bar 57  bar 83  bar 162443
 
2009 Q1 27  bar 15  bar 12  bar 048
Q2 89  bar 56  bar 33  bar 2823
Q3 105  bar 60  bar 45  bar 2439
Q4 134  bar 82  bar 52  bar 4048
 
2010 Q1 27  bar 23  bar 4  bar 040
Q2 115  bar 83  bar 32  bar 0248
Q3 73  bar 26  bar 47  bar 0443
Q4 67  bar 63  bar 4  bar 040
 
2011 Q1 19  bar 17  bar 2  bar 200
Q2 72  bar 64  bar 8  bar 080
Q3 104  bar 54  bar 50  bar 2048
Q4 73  bar 69  bar 4  bar 040
 
2012 Q1 19  bar 19  bar 0  bar 000
Q2 84  bar 84  bar 0  bar 000
Q3 121  bar 85  bar 36  bar 2826
Q4 123  bar 117  bar 6  bar 240
 
2013 Q1 170  bar 40  bar 130  bar 00130
Q2 470  bar 314  bar 156  bar 216138
Q3 94  bar 94  bar 0  bar 000
Q4 126  bar 95  bar 31  bar 0031
 
2014 Q1 54  bar 30  bar 24  bar 0420
Q2 454  bar 151  bar 303  bar 423276
Q3 134  bar 96  bar 38  bar 0434
Q4 214  bar 118  bar 96  bar 01680
 
2015 Q1 41  bar 32  bar 9  bar 207
Q2 263  bar 160  bar 103  bar 00103
Q3 378  bar 61  bar 317  bar 2814275
Q4 164  bar 86  bar 78  bar 26745
 
2016 Q1 181  bar 19  bar 162  bar 00162
Q2 357  bar 145  bar 212  bar 00212
Q3 155  bar 99  bar 56  bar 0056
Q4 167  bar 111  bar 56  bar 0056
 
2017 Q1 68  bar 30  bar 38  bar 0434
Q2 280  bar 144  bar 136  bar 04132
Q3 156  bar 80  bar 76  bar 0076
Q4 275  bar 143  bar 132  bar 00132
 
2018 Q1 58  bar 32  bar 26  bar 0026
Q2 162  bar 152  bar 10  bar 460
Q3 186  bar 106  bar 80  bar 0080
Q4 206  bar 109  bar 97  bar 0097
 
2019 Q1 79  bar 34  bar 45  bar 0045
Q2 191  bar 101  bar 90  bar 0090
Q3 94  bar 92  bar 2  bar 200
Q4 261  bar 135  bar 126  bar 00126
 
2020 Q1 16  bar 16  bar 0  bar 000
Q2 192  bar 111  bar 81  bar 0081
Q3 344  bar 89  bar 255  bar 20253
Q4 478  bar 122  bar 356  bar 00356
 
2021 Q1 302  bar 64  bar 238  bar 00238
Q2 456  bar 215  bar 241  bar 216223
Q3 257  bar 105  bar 152  bar 00152
Q4 137  bar 127  bar 10  bar 280
 
2022 Q1 148  bar 48  bar 100  bar 00100
Q2 458  bar 198  bar 260  bar 07253
Q3 675  bar 95  bar 580  bar 244534
Q4 95  bar 78  bar 17  bar 4013
 
2023 Q1 130  bar 7  bar 123  bar 00123
Q2 305  bar 96  bar 209  bar 00209
Q3 169  bar 103  bar 66  bar 0066
Q4 84  bar 74  bar 10  bar 0010
 


Sources: STI: PopStats and STI: Colossus