A construction boom in Eau Claire that caught national attention could mark only a temporary boost before the city falls back to the pack of struggling markets.
The central Wisconsin city recorded a 19 percent increase in construction jobs in August from the year-ago month, the second-largest increase in the country, according to the Associated General Contractors of America.
Three major projects, totaling $172 million, are responsible for the boom, said Bob Barker, executive vice president of the Associated General Contractors of Wisconsin.
“I think you’ll see the numbers go down now that those projects are completed,” Barker said. “I’ve talked to some members who have said that work has fallen off the table again.”
Matt Faulkner, vice president of Market & Johnson Inc., Eau Claire, said his company got two of the jobs, and, despite the economy, those projects represent a continuation of five good years of business for his company.
“We just finished two big projects for Nestle Nutrition division,” Faulkner said. “We’re having an excellent year, if not a record year.”
Both Nestle USA projects have been in the works for many years, Faulkner said.
Eau Claire, a city of fewer than 100,000 residents, typically doesn’t see more than $10 million in projects at one time, Faulkner said.
Having three major projects going at once was unusual.
The Nestle projects were additions to the company’s plants. One employed 200 people for a year, and the other employed 300 for 18 months, Faulkner said.
The Boldt Co., Appleton, recently completed a $112 million expansion of Luther Midelfort Hospital in Eau Claire.
Blaine Tuchscherer, director of health care construction for Boldt, said that health care construction is the largest segment of the company’s business. That market, he said, often lags the rest of the industry by 12 to 18 months.
“The plans for this project were made between 2006 and 2008,” he said. “We’ve been pretty busy for the last year but think we’ll see the impact in 2011. If we can weather that blip, we’ll be OK.”
Tuchscherer said his company encourages subcontractors to team with local businesses and that has resulted in 45 to 50 percent of the workers on the job coming from within 50 miles of the project.
Only 56 of 337 metropolitan areas reported increases in construction employment between August 2009 and August 2010, according to the U.S. Bureau of Labor Statistics. Overall, the numbers were the best since September 2008.
Ken Simonson, chief economist for the AGC of America, said Eau Claire’s increase amounted to 600 jobs. The percentage increase placed Eau Claire second to Hanford-Corcoran, Calif., for the largest percentage gain from the year-ago month.
Overall, the numbers are still dismal with 245 metropolitan areas reporting a loss in construction jobs and another 36 remaining flat.
Statewide, there was a 2 percent increase in construction employment in August. The Milwaukee-Waukesha-West Allis area had the largest loss of jobs, 1,000 fewer from the same period a year ago.
Madison, the only other Wisconsin community with a decline, saw 200 fewer jobs.
“It appears that the worst is finally over,” said Simonson. “But the industry has a long way to go before we see employment at pre-recession levels.”
Barker was less optimistic.
“I think we’re in for another 12 to 18 months of hard times,” he said. “Credit markets continue to be tight and people have the idea that they have to have more equity before they undertake any projects. The uncertainty in the political realm is also a factor.”