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Russ Hanson, Executive Vice President, Associated General Contractors of North Dakota

In North Dakota: Construction is big contributor to economy

For decades, the construction industry has suffered from an image problem. That’s reflected in sayings such as, “If you can’t do anything else, you can always do construction.”  The image of a construction worker has typically included worn or torn jeans, beat-up hand tools and a dirty work situation. Construction work also has been thought of as an occupation offering lower-tier pay and benefits.  

All of those are misnomers, especially in the 21st century.

Technology has evolved in our industry, and all levels now are technical. That means our workforce needs to be computer literate, as iPads are a key tool used by construction crews to help them with their projects. Equipment is highly technical, and much of it is computerized.

And construction work provides a competitive wage, with most companies offering their full-time employees health insurance and retirement benefits.

In fact, construction employment wages are a big contributor to the North Dakota economy, much bigger than many realize.  In 2015, 34,000 individuals were employed in the construction industry.  That compares with about 20,000 a decade ago.   

A major component of the increase was the economic boom of 2011-14, so considering our softening economy, it will be interesting to monitor the numbers in years to come. But many companies that arrived during the boom are confident the economy will recover and are staying in the state. That suggests the industry numbers may not be reduced by much.

Statewide, construction employee wages were $2.2 billion in 2015. Construction employees earned an average of $65,000 a year in 2015 and about the same amount in 2014.

The overall average is a little misleading, as wages can vary greatly depending on location. In some counties, wages were less, but the counties where lots of construction projects are underway actually are in excess of the statewide average – by quite a bit in some cases.  

For example, the wage average in Ward County is $65,000, in Williams County it’s $83,000, in Mountrail $73,000, and McKenzie County leads the state at $93,000. Grand Forks, Burleigh and Cass county averages were in the mid- to upper-$50,000 range.  

Remember, this is just the wage and doesn’t include health insurance and retirement benefits.   The bottom line is that construction is a healthy industry where a person can earn a decent living. Furthermore, many of the dollars in those wages are returned to the North Dakota economy.

Construction workers provide the workforce needed to build, maintain and repair North Dakota’s infrastructure of all kinds – highways, water development and vertical building.  One of the key elements of a sound economy is quality infrastructure, and North Dakota construction employees are proud of their quality work in this area.

The economic boom years provided many challenges for the state. Because of the fast-growing population in oil country and elsewhere in North Dakota, roads needed repair and reconstruction, schools and water treatment plants had to be built, and jails and hospitals were expanded and constructed.  

From 2011-17, multiple billions of dollars were invested in these infrastructure needs. Today, with the slowing economy, fewer resources are available for such investments, though many needs remain. Highway construction funding is a visible example. For the past four years, the North Dakota Department of Transportation had construction programs valued at about $800 million per year, and the 2015 North Dakota Legislature passed “Surge Funding” to provide $1.2 billion in infrastructure funding for the 2015-17 biennium.

In contrast, the scenario for construction funding looks to be drastically different for the next few years. The North Dakota Department of Transportation will have an expected $465 million program in 2017 and $275 million in 2018, a far cry from the resources of previous bienniums.

It will be interesting to see how those changes will affect North Dakota’s economy and the safety of our infrastructure system.   

But whatever resources are available, the North Dakota construction industry can be counted on to build those projects successfully and safely.

Russ Hanson

Executive Vice President

Associated General Contractors of North Dakota