The area's commercial construction industry is starting to rebuild what it lost during the peak of the pandemic on the foundation of Mayo Clinic and school district projects.
Jim Kelly, president of Construction Partnership, which works with area unions representing 1,700 people working on commercial projects, said local construction was hurt by the pandemic, but the blow wasn’t as damaging as it was for other industries.
“Construction workers were seen as somewhat essential workers,” said Kelly. “Some states completely stopped construction, which would have been devastating to us here.”
However, the COVID-19 pandemic did put many major projects on hold., and about 20 to 30 percent of Construction Partnership workers were laid off.
“About 30 to 40 percent of our work went on hold. Now that is slowly starting to turn back on,” said Tom Leimer, general manager of Knutson Construction’s Rochester office. “It’s better than what it was, and we’re building our way back.”
His team is now up to 80 to 90 percent of its usual levels, and more workers are being brought on each week.
As that construction freeze thaws. Kelly estimates that overall commercial construction employment is now down just 10 to 15 percent from usual levels.
“Right now, the future is looking pretty good, especially with the projects that Mayo Clinic has going on,” he said this week.
Mayo Clinic represents 50 to 60 percent of area commercial construction projects.
An expansion of the Saint Marys campus is in the final stages. Work on the 64,000-square-foot Anna-Maria and Stephen Kellen research center is underway on the corner of Third Street and Fourth Avenue Southwest. Mayo Clinic insiders say more, unnamed projects are expected to break ground in the near future.
Construction projects at Rochester Public Schools are bustling, with a new middle school and a new elementary school being built. Reconstruction of Harriet Bishop and Longfellow elementary schools are on the way, along with several major swimming pool projects.
The private sector is also coming back. One of the largest local projects is M.A. Mortenson Co.’s multi-million dollar Two Discovery Square complex being built downtown in the Destination Medical Center zone. The center, which will connect to the original One Discovery Square building, recently topped off its steel frame.
One challenging side effect of the COVID-19 pandemic has been how it has driven up the prices of almost all building materials. The cost of everything, from plywood, to lumber, to steel has skyrocketed.
“That has been an interesting twist,” said Leimer.
The added difficulty in acquiring steel in a timely manner has forced Knutson to re-think the use of bar joists to support the roofs of some of its buildings under construction. That means shifting the design to use beams instead to keep construction on schedule and on budget.
Olmsted County building permits tell the story of the steady recovery, with the numbers going up, but not to 2019 levels yet.
On the residential construction side, things are bouncing back at a much slower rate, despite demand for more houses.
Permits for single-family homes hit a six-year low in 2020, with only 266 filed in Olmsted County, compared to 289 in 2019, 347 in 2018 and 429 in 2017.
However, the first two months of 2021 show signs of improvement. Pre-pandemic, there were 30 single-family permits filed in January and February of 2020. In 2021, a total of 31 permits were filed for those same months.
That compares favorably with 2019 with just 11 single-family permits filed in January and February. In 2018, 35 permits were filed during that same time period.