Construction unemployment in Minnesota nears rock-bottom

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 to 2.1 percent in May, its lowest level since 2001, and the third-lowest rate in the country, according to estimates released Tuesday by Associated Builders and Contractors, a national trade group.

"There's a shortage, specifically, for skilled workers," said Bernie Markstein, the economist who made the estimates based on Department of Labor data. "Skilled workers left during the downturn, and many of them have not returned. Also during the downturn, training and apprenticeship programs were suspended."

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

Minnesota, with its slow-growing workforce and already low unemployment, has one of the tightest labor markets in the United States and construction is a prime example. Construction unemployment in the state fell from 4.6 percent in May last year to 2.1 percent last month. Only Idaho and Nebraska have a lower rate.

"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."

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

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.

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.

Pay doesn't appear to be rising dramatically because margins are slim in the industry, and because unskilled wages are likely holding down the averages, said Markstein, the economist.

"You might be seeing some real jumps in the wages for skilled workers, but it doesn't show up in the average because the lower-skilled workers' wages aren't rising as much," he said.

Adam Belz • 612-673-4405 Twitter: @adambelz