As spring construction season begins, economy shows signs of improvement

Bemidji carpenter Roger Ehrhorn has been through some lean times.

Since the recession began, he hasn't worked on very many new homes. Instead, he has had to make do with mostly smaller projects like a remodeling job in the back room of a local pizza restaurant.

Ehrhorn had long stretches where he was laid off and collected unemployment insurance. But with spring, he sees more work ahead.

"It's construction," Ehrhorn said. "I mean, there are down times, there are good times, you know? Right now things are starting to pick up again."

Thanks to the mild winter, the spring construction season started early in Minnesota. Contractors hope that increased consumer confidence will help the industry inch its way back from the effects of the Great Recession.

There are signs that in north central Minnesota building is on the rebound. Employment statistics show that in 2011, the number of construction jobs incased 4.8 percent over 2010 in a region that includes Beltrami, Hubbard, Clearwater, Mahnomen and Lake of the Woods counties.

Unemployment insurance claims for the region are down. Initial claims in the construction industry last month were nearly 40 percent lower than the same time last year. That follows more modest decreases in each of the past two years.

However, the dramatic drop in unemployment claims doesn't take into account those who have left the construction industry.

Nate Dorr, an analyst for the state Department of Employment and Economic Development, said some workers left the construction trades to seek training in other fields, or left the region altogether for better job opportunities.

Dorr said the data point to a modest recovery for the region, with a long way to go.

"In the lakes area of Brainerd, Bemidji, Grand Rapids, we were hit really hard with construction layoffs as people stopped building vacation homes and that sort of thing," he said. "I think right now there's just so many houses on the market because of the financial crunch that we went through in 2007 to 2009."

U.S. Census data show there were 375 permits reported for new single family home construction in February in Minnesota. That's about 54 percent higher than at the same time last year, and the highest February permit number in five years. The census numbers are the most accurate gauge of activity as not every region of the state requires a permit.

But the statistics don't reflect what contractors anticipate for this construction season.

Howie Zetah, who owns a midsize construction company in Bemidji, employed 25 workers before the recession. But since 2009, he has laid off more than half.

With business this spring up about 25 percent over last year, Zetah said he will probably have to hire six to eight carpenters.

"The economy is coming around. I think people are cautious, but they're moving forward with things," Zetah said. "I think I'm seeing, both in residential and commercial, a definite upswing... I think builders in the whole area are seeing that same swing."

It's unclear how the recession affected the construction work force. Zetah said he knows that some skilled construction trade workers — among them carpenters, block layers and skilled cement workers — left the region to find jobs.

"I think with the boom to our west in North Dakota... between the oil and the floods in Minot, there's a lot of opportunity out there," he said. "So I think a lot of folks that were waiting around here moved that direction and are making money out there now."

State agencies in Minnesota and North Dakota don't track how many construction workers move across state lines for work.

Bob Sweeney, executive chairman of Nor-Son Inc., a regional construction company based in Baxter, said he and other contractors worry the oil boom in North Dakota could eventually affect the availability of skilled workers here in Minnesota, once the construction economy recovers.

"There's going to be a shortage and it's going to show up," he said. "Not exactly sure anyone can tell you when that's going to be... but it's going to happen, there's going to be a definite shortage."

But for this season, Sweeney said there are still construction workers waiting to be rehired. He anticipates Nor-Son will increase its workforce by 30 percent. The company, which built about half a dozen homes in 2011, plans to build twice as many homes this year.

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