Business looking up for Northland builders and remodelers
A year ago, as the annual Arrowhead Home & Builders Show kicked off the Twin Ports home improvement season, industry experts were expecting a big year.
Nationally, the industry already was in the midst of a comeback, thanks to an improving economy and pent-up demand from the recession. That boost in business was expected to reach the Northland last year.
So did it?
It sure did for Lindquist & Company in Duluth, which does kitchen and bath remodels.
“Things definitely picked up,” said co-owner Rebecca Lindquist. “It was almost like somebody opened a floodgate. On a certain day last year, the phones started ringing. Everybody enthusiastically called about doing a project.”
That day came in mid-March 2013.
“We couldn’t help thinking, where were you last year and the year before?” she said of the callers. “But it’s a wonderful thing.”
So, the interior design business had a good year last year. And Lindquist said that momentum is continuing this year.
Like Lindquist & Company, many businesses are entering 2014 with jobs to do, according to the National Association of the Remodeling Industry, an industry group.
And that hasn’t happened in the past few years.
Consumer confidence is up so they’re more comfortable spending money on projects postponed during the recession and more comfortable investing in home upgrades, said Tom O’Grady, who heads NARI’s strategic planning and research committee.
Chelle Eliason, executive director of the Arrowhead Builders Association, said business did, indeed, improve for contractors in Northeastern Minnesota in 2013. And she expects that to continue this year. The association sponsors the annual Arrowhead Home & Builders Show. This year’s show opens Wednesday at the Duluth Entertainment Convention Center.
“Things are picking up,” Eliason said. “We’re looking at a stronger year all the way around. We’re seeing construction activity up, both locally and regionally.”
When new home construction plummeted with the recession, many builders shifted to remodeling work to survive. But signs are that a national comeback in new home construction is reaching the Northland.
Last year, the city of Duluth issued 39 permits for new single-family home construction. That’s up from a low of 21 in 2011. While that’s a long way off from 2004’s 121 permits, it indicates a rebound has begun.
With the recent creation of numerous well-paying jobs in the Duluth area by Cirrus Aircraft, AAR Aircraft Services and various engineering firms, the crunch is on for more market-rate housing.
“Going forward, we are going to see an increase,” Eliason said.
Snow, cold hurt uptick
But the industry uptick in the Northland was tempered by a shortened construction season last year.
“We had a rough construction season, weather-wise,” Eliason admitted. “We had a late start to summer and an early start to winter and a long winter.”
City records suggest it had an impact.
The number of permits issued in Duluth for home improvements dropped from 1,849 in 2012 to 1,544 in 2013, city records show. Building permits are needed for projects ranging from window installations to kitchen remodels to home additions.
As a Duluth contractor doing primarily exterior home projects, the preponderance of cold, snowy weather in the last year has frustrated Jim Perrault.
“The warm months were good, but when you have 7½ months of snow last year, it’s tough to make a living as an exterior contractor,” he said.
He’s had plenty of projects to do, but the longer-than-usual wintry weather in the past year has kept his construction company from getting to many of them.
“Last year, I was afraid to sell anything, because we couldn’t do it,” Perrault said. “It’s frustrating when you can get the work, but you can’t get it done.”
While his crews can work outside when it’s 20 degrees, deep snow hampers their work. On some projects, workers are shoveling snow for two hours before they can even get to the job itself. And the next day, they may come back and have to shovel again.
With a heavy snowfall in early December, followed by unrelenting subzero cold, Perrault said he ended 2013 with about 40 roofing jobs he couldn’t get to because of the weather.
But Perrault is optimistic. His business focuses on fixing up older homes, of which Duluth has plenty.
“I do think this next year will be better, because it can’t get any worse,” he said.
Economy Garages in Hermantown also has been slowed by the Northland’s longer-than-usual wintry weather, which cuts down on the construction season.
But the business’s improved outlook in the past year has overshadowed that.
“We definitely are seeing growth right now,” sales manager Dave Michelson said. “My sales staff is especially excited, people are interested.”
That’s quite a difference from 2008-09 when business slowed dramatically, resulting in staff cuts and smaller jobs.
“People were very conservative in what they were buying,” Michelson said of the garages, cabins and other building shells they did build: “They were not buying a lot of fancier features in the building. Now people are making bigger investments. They’re getting more confident in this area.”
With improved business, Economy Garages has added staff and is back to its peak staffing levels.
“We’re getting a lot of inquiries,” Michelson said. “We are making sales. For this time of the year, we’re very optimistic.”