Investments in new construction soars in recent years

Tim Krohn, The Free Press, Mankato, Minn.
·2 min read

Jun. 9—MANKATO — Even as the pandemic brought uncertainty to many businesses and public entities, planning for investments in new construction soared in the region for commercial, industrial and public buildings.

In 2021, money spent on new construction for commercial, industrial and public buildings in Blue Earth and Nicollet counties jumped nearly 99% from the previous year.

Ryan Vessey, economic development and research manager for Greater Mankato Growth, said that while it was expected that 2020 construction would be reduced amid the heart of the pandemic, the fact investments grew so much in 2021 is impressive.

"When you look at building permits that were pulled in 2021, it means there was confidence in people in 2020 because they were putting a lot of money into preparing for those projects."

And while 2020 was a down year, the 2021 numbers were 30% over the pre-COVID 2019 investments.

Beside the big one-year jump, the five-year trend was also very strong, according to a just released "pipeline" report from the Regional Economic Development Alliance and GMG. The alliance consists of the two counties and communities within them. The pipeline report looks at current and upcoming capital investments through building permit requests in the two counties.

In the past five years, capital investments for commercial, industrial and public projects in the two counties grew to over $750 million. Over the past 10 years, the investment is more than $1.5 billion.

The construction figures do not include any single- or multi-family housing construction.

Construction projects by the manufacturing sector were particularly strong. Their investments grew by 127% last year compared to 2020 and 420% compared to 2019.

Vessey said that in the past five years about half of the construction was done by public entities, but private sector investments grew faster in the last couple of years.

"Public investment over the last five years averaged $75 million per year. It fell a lot in 2020 because cities and counties put off projects. Private investment has averaged $80 million a year and in 2021 it was up to $85 million."