Construction has helped fuel the engine of economic growth for
the Ninth District economy. In Minnesota and the Dakotas, contracts
awarded for private and public buildings rose sharply in 1997 and
1998; however, the number of contracts awarded for building construction
through October 1999 is slightly lower than 1998.
The demand for construction employees continues strong in many
parts of the district. Construction wages in Minnesota have recently
climbed more than 7 percent over last year, outpacing the nation
by about 3 percent.
However, signs of slowing are emerging as building projects come
to completion, especially in Minneapolis/St. Paul. The vacancy rate
for office space in the metro area has recently increased, suggesting
supply is catching up with demand. According to CB Richard Ellis,
an international commercial real estate firm, vacancy rates are
expected to climb over the next couple of years, reaching 14 percent