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Construction unemployment in Minnesota nears rock bottom

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Construction workers work on the Endi apartment and retail complex on the corner of London Road and 21st Avenue East in Duluth Wednesday afternoon. (Clint Austin / caustin@duluthnews.com)2 / 4
A member of a construction crew works on the exterior of the United Properties development. (Steve Kuchera / skuchera@duluthnews.com)3 / 4
The United Properties development at Kenwood and Arrowhead is one of many locations in the area currently under construction. (Steve Kuchera / skuchera@duluthnews.com)4 / 4

It’s getting easier to find a construction job in Minnesota, and harder for employers to find construction workers.

Construction unemployment in the state fell in May to 2.1 percent, its lowest level since at least 2004, and the third-lowest rate in the country, according to data released Tuesday by the Associated Builders and Contractors, a national trade group.

Unemployment in the building trades fell in 46 states in May compared to a year earlier, to a national average of 5.2 percent.

Minnesota, however, with its slow-growing workforce and already low unemployment, has a ultratight labor market and construction is a prime example.

Minnesota’s construction unemployment rate fell from 4.6 percent in May last year to 2.1 percent last month. Only Idaho and Nebraska have lower construction jobless rates.

Some 124,000 Minnesotans worked in construction in May, the highest number since 2007. The average hourly pay is $31.33, about 60 cents higher than a year ago.

“Our industry is busy, which is great,” said David Siegel, executive director of the Builders Association of the Twin Cities, which focuses on residential construction. “We’re building around 10,000 or 11,000 units right now. If the world stays relatively stable, I think we’ve got a pretty good forecast for the next few years.”

Chelle Eliason, executive officer of the Arrowhead Builders Association, said the majority of the organization’s members in the Northland are looking to hire but are unable to find workers to fill positions. Several of those companies, she said, are offering incentive plans to entice construction workers to their companies.

Eliason added that there is a large need for construction workers in the region. In Duluth and Hermantown alone there are a number of large projects underway — including a new Fleet Farm store, the Endi development at 21st Avenue East and London Road and the Kenwood Village development.

“I just don’t think there are enough builders to go around anymore,” she said.

Eliason said she thinks the decline in number of construction workers is part of a larger trend of more students pursuing a four-year degree instead of programs for trades skills. In addition, she said many schools have stopped offering trades classes.But Eliason said Lake Superior College is set to kick off a new trades program that she hopes will increase the number of local building professionals.

Apartment and condominium construction has probably reached its apex in the Twin Cities, Siegel said, and single-family construction is finally beginning to grow. The problem for builders is that they can’t find enough people. Builders are telling Siegel that a lack of workers is delaying some projects.

“So many people during the recession left the industry, or didn’t come into the industry, and now we have a shortage,” Siegel said. “If you like to be able to work with your hands, and you like to create things and drive around the community and say ‘I built that,’ this is a great place to be.”

Plumbers, electricians, framers and heating and ventilation subcontractors are all in demand, thanks to the aging of the construction workforce. But the work is increasingly complex, Siegel said, because of expanding building codes and regulation. “You’ve got to be sharp,” he said.

Many firms are willing to offer new workers on-the-job training, Siegel said.

Only three states — Pennsylvania, North Dakota and South Dakota — had their May estimated construction unemployment rate increase from a year ago, while Texas had no change in its rate from May 2015. The year-over-year increase for Pennsylvania and South Dakota was small, up 0.1 percent. All states had construction unemployment rates under 10 percent, an occurrence last observed in July 2015.

The News Tribune contributed to this report.

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