Second straight increase for construction spending in Rochester

Second straight increase for construction spending in Rochester
The future Lourdes High School building is just one example of the construction projects in progress in northwest Rochester.

Construction spending increased for the second consecutive year in Rochester, reaching $205.6 million in 2011, up 3.2 percent from 2010.

It remained far behind the record $389.3 million in 2005, in the midst of the home construction boom.

But the totals indicate that the construction industry has started to pull out of the valley it hit during the recession, builders say.

"We do see the construction industry as going in the right direction," said Mike Larson, chief estimator for Knutson Construction. "We don't see an about face or anything like that. It's going to be a slow recovery."

One plus is that Mayo Clinic started building again, starting construction of a $188 million proton-beam therapy center, an addition to Saint Marys Hospital and other projects. More are expected in the future.


"We did see somewhat of a pickup from Mayo, and the outlook is promising," Larson said.

Another big project started this year was the new $30 million Lourdes High School on the northwest side.

But one area that remains slow is single-family home permits. Only 191 were issued in 2011. They peaked at 962 in 2004 and the numbers have dropped every year since.

Soaring home prices and home construction in the early 2000s led to a housing bubble that burst in 2008 when the recession hit. Thanks to a strong local economy based on the still-growing health-care sector, Rochester has avoided the worst of the slump, but home prices have been stagnant.

Construction also picked up near the end of the year, with just $27 million in permits in the first quarter but $82.8 million in the fourth quarter.

The spending was split between $58.7 million for residential construction, $62,6 million for commercial and $71.2 million for additions/alterations.

"Yes, it was a fair year; we've had better and had worse," Larson said.

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