REGIONAL — Minnesota’s construction industry keeps moving forward, even though few industry experts feel entirely confident about what comes next. Strong demand is keeping crews busy, but hiring challenges and economic jitters continue to shape how builders approach the year ahead.
Peter Hilger, who directs the University of Minnesota’s construction management program, said in a recent news release about the industry that the mood across the industry is a mix of momentum and caution.
“If it is possible to have both feet on the gas and hovering closely over the brake at the same time, that would best describe the current construction industry climate,” Hilger said.
State projections back up the sense of momentum. Construction jobs in Minnesota are expected to grow by 7.6 percent through 2032, noticeably higher than the 4.6 percent projected across all industries. Pay is rising too. Average wages climbed to about $85,000 last year, roughly 16 percent above other sectors.
But the industry hasn’t been able to shake its labor shortage. Some trades never fully regained workers lost during the pandemic, and immigration pressures have tightened the labor pool even more.
“The demand for labor stemming from the COVID crisis remains high and has not reached pre-pandemic levels in certain sectors,” Hilger said.
Immigration concerns, he added, have “driven away a significant section of the construction labor pool.”
That gap shows up on job sites. Contractors are facing higher project costs and longer timelines, and recruitment continues to be a stubborn challenge. Hilger said construction still carries an image problem that keeps people from considering it as a long-term career.
“Construction still suffers from the ‘dirty jobs’ syndrome, and it takes a special person to want to work in the field,” he said. “We just need more to fulfill demand.”
Economic uncertainty adds another layer. Interest rates, shifting federal priorities, and rapid swings in tariffs make long-term planning harder than it should be. Hilger said it brings back memories of the 2008 recession, even though today’s pressures feel more policy driven than market driven.
“What is on economists’ minds, and my mind as an educator, is revisiting a 2008 Great Recession scenario that is largely a manufactured outcome,” he said. “We need to get back to a steady state, where project planning can account for less uncertainty in future market supply, demand, and pricing.”
For all the challenges, Hilger sees plenty of opportunity ahead, especially in technology. Drones, robots, and early applications of artificial intelligence are starting to change how projects are planned and delivered.
“Innovation. It is just a matter of time,” he said. “The industry needs smart people to design and implement these solutions, as it has historically lagged behind other industries in technological innovation.”
Hilger said Minnesota has a strong foundation to promote workforce growth thanks to union training centers and technical programs, but the state needs more workers to match long-term demand. For now, construction activity continues to grow, even as the industry keeps an eye on the uncertainties ahead.