FOUNDATIONS NEWSLTR AUGUST

2023 JUNE MEMBERSHIP REPORT

Membership Total: 402 Retention rate: 93.8%

STAFF

Patrick Sexton, Executive Director Pat@RochesterAreaBuilders.com

Shelly Bahlmann, Shelly@RochesterAreaBuilders.com

Builders, Bags & Brews, Golf Outing, Sporting Clays, Home Show, Newsletter, Showcase Magazine, RAB Update, Member Plus App & RAB Events App

Rebekah Fierst, Rebekah@RochesterAreaBuilders.com Ambassadors, Awards, Commercial Builders Council, Community Relations, Education, Membership, Fashion Show, Program, Remodelers Council, Executive & 40 Below

Elizabeth Sullivan-Burton, Elizabeth@RochesterAreaBuilders.com

Builders Exchange Trustees, Showcase, Remodelers Tour and Website

BOARD OF DIRECTORS

PRESIDENT

J ason Scrimshaw, Kimley-Horn & Associates, Inc.

VICE PRESIDENT

Adam Giannini, Knutson Construction

SECRETARY

Jennifer Mitchenll, Edina Realty

TREASURER

Vanessa Hines, Widseth

PAST PRESIDENT

Becky Holmen, Haley Lighting

MISSION STATEMENT

DIRECTORS

Derrick Chapman, Schmidt Carpentry

Adam Kramer, Kramer Contracting

Jarett Jones, Merchants Bank

Aaron Thompson, The Design Connection

Austin Ryan, Ryan Windows & Siding

Kelsey Vaszily, Kraus-Anderson Construction

Melissa Barbour, TLS Companies, LLC

Joe West, Valor Mechanical

Julie Herrera-Lemler, Rochester Area Economic Development, Inc. (RAEDI) / SBDC

BUILDERS EXCHANGE COUNCIL CHAIR

Katie Reinhart, Kraus-Anderson Construction

COMMERCIAL BUILDERS COUNCIL CHAIR

Keith Kranz, LVC Companies

DEVELOPMENT COUNCIL CHAIR

TBD

REMODELERS COUNCIL CHAIR

Becky Holmen, Haley Lighting

40 BELOW CHAIR

Adam Giannini, Knutson Construction

NATIONAL LIFE DIRECTORS

Steve Buss, Cornerstone Builders & Real Estate, Inc.

NATIONAL DIRECTORS

Dana Hlebichuk, Widseth

Levi Kaiser, Benike Construction (Rep)

Todd Severson, TLS Companies, LLC

STATE DIRECTORS

Mike Allen, Mike Allen Homes, LLC

Jay Burke, Heartwood Homes

Jean DeWitz, DeWitz Home Builders, Inc.

Kathy Einck, Maplewood Homes, LLC (Rep)

John McGuine, JM Consulting

John Eckerman, RSP Architects

Kenneth Bush, Bush Companies

The Rochester Area Builders, Inc, chartered in 1953, is a professional organization of commercial & residential builders, remodelers, developers and associated businesses dedicated to advancing the building industry in Southeast Minnesota.

We are the trusted voice of the industry, providing leadership, education, networking, and information resources to our members, community and government officials.

FROM THE PRESIDENT

and networking. Whether you participate in the tournament or join us as a spectator, it will be an enjoyable event for all.

• Annual Sporting Clay Shoot: Experience the thrill of shooting combined with the camaraderie of fellow members at our Annual Sporting Clay Shoot on Thursday, September 14th. This exhilarating event provides an excellent opportunity to test your shooting skills, build connections, and enjoy the beautiful outdoors. In addition to these events, I have some important reminders to share:

• Registration is now open to reserve your booths for the 2024 Home Show. The Home Show is a prime platform for connecting with potential customers, displaying your products and services, and generating valuable leads. Be sure to reserve your booth early to secure your desired location and maximize your visibility.

First and foremost, I want to express my appreciation to each and every one of you for your continued support and dedication to the Rochester Area Builders Association. Together, we have built a strong community of professionals who are shaping the landscape of our region, and I am honored to serve as your President.

As we move forward into the heart of summer, I encourage you to make the most of the opportunities that lie ahead. Our association has been diligently working on organizing a series of events designed to foster networking, lead sharing, and professional growth.

Here’s a reminder on upcoming events:

• Member Appreciation Night: Join us on Tuesday, July 25th at LTS Brewing Company for our Member Appreciation Night. This fantastic event is a great opportunity to celebrate our incredible community, express our gratitude to our valued members, and enjoy an evening of camaraderie, laughter, and networking.

• Builders Bags & Brews Cornhole Tournament: Mark your calendars for Saturday, August 12th at LTS Brewing Company. Our annual Builders Bags & Brews Cornhole Tournament promises a funfilled evening of friendly competition, socializing,

• The registration for the Fall Showcase of Homes & Remodelers Tour is also open. Take advantage of early registration discounts and showcase your projects to a captivated audience. The Fall Showcase of Homes & Remodelers Tour is a fantastic opportunity to highlight your craftsmanship and expertise.

Before we conclude, I would like to take a moment to introduce and welcome our new Executive Director, Patrick Sexton. We are thrilled to have Pat join us in this important role, as he brings a wealth of experience, knowledge, leadership, and relationships to our association. I encourage all of you to find an opportunity to introduce yourself to Pat at one of the many upcoming events we have planned. His presence and expertise will undoubtedly enhance our collective efforts to grow and strengthen our association.

Thank you for your continued trust and support. Let’s embrace the opportunities ahead, and together, let’s build a prosperous future for the Rochester Area Builders Association.

Wishing you a safe and successful summer season.

Jason Scrimshaw, P.E. Kimley-Horn 2023 RAB President

JASON SCRIMSHAW President Rochester Area Builders, Inc

Distributed by Tulip Tree Marketing

Contact Pat Sexton of Rochester Area Builders (507) 282-7698 | pat@rochesterareabuilders.com

PRESS RELEASE

Rochester, MN, 7/18/2023 • The Rochester Area Builders’ Board of Directors is proud to announce the hiring of their new Executive Director, Patrick Sexton. He officially joined the team on July 12, 2023.

“When choosing our next leader, we placed special focus on commitment to the community, experience in the legislative space, and ability to lead and connect,” said Jason Scrimshaw, Board President. “It was very clear to each of us that Patrick is the right person to spearhead this new chapter for Rochester Area Builders.”

Patrick comes to the organization with extensive experience working in legislation at the state capitol, communications and media relations with Honeywell and West Group, public affairs consulting, and commercial real estate. He has a strong belief in the community and serves as a Board member for Boys & Girls Club, Rochester Sports Foundation, and Rochester Hockey Boosters.

Patrick and his wife Erin have called Rochester their home for over ten years. Erin works at the Mayo Clinic, and they are proud parents of three children and enjoy chasing them in their adventures in hockey, golf, and soccer.

This position, formerly held by John Eischen, is key to the success of the organization and forward momentum for the building industry. “This opportunity is an honor,” said Patrick. “Together with our members and the community, I am committed to advocating for the construction industry, building relationships with our supporters, and be ing a positive leader for our team.”

Rochester Area Builders, Inc., chartered in 1953, is a professional organization of commercial and residential builders, remodelers, developers, and associated businesses dedicated to advancing the building industry in Southeast Minnesota. They are the trusted voice of the industry, providing leadership, education, networking, and information resources to their members, the community, and our government officials.

To learn more about Rochester Area Builders, visit RochesterAreaBuilders.com or call (507) 282-7698. ###

Rochester Area Builders

2023 Calendar of Events

Builders, Bags & Brews @ LTS Brewing Company

NAHB Mid-Year Board Meeting – Radisson Hotel

Networking Night @ J.F. Ahern Company

Sporting Clay Youth Shoot

Remodelers Tour & Fall Showcase of Homes

General Membership Meeting @ TBD

Networking Night @ F&M Bank DECEMBER

8 Holiday Party @ The Hilton 25-26 Office Closed – Christmas Holiday

WELCOME NEW MEMBERS

EVEN Hotel

Jessica Taylor Hotel

507.258.2323

evenhotel.com/rochestermn

Holty Home Team

Nick Holty Residential Builder

507.429.6580

holtyhometeam.com

MEMBER & COMMUNITY ENGAGEMENT DIRECTOR

POSITION TITLE: Member & Community Engagement Director REPORTS TO: Executive Director

The Member & Community Engagement Director is responsible for the recruitment and retention of Rochester Area Builders membership, along with community outreach initiatives. The position focuses on member relations and event planning. Duties include attending committee meetings and board meetings within the Association, coordinating volunteers, working with local schools and non-profits, lining up networking events for members, coordinating continuing education classes for licensed building contractors, planning the Association’s annual fashion show, bean bag tournament, holiday party and Remodelers Tour.

Full description can be found HERE

If you think you would make a great team member, please send your resume’ to RAB@RochesterAreaBuilders.com

Thank you Custom Alarm for hosting the June Networking Night. Lots of great conversation and networking were had by all.

MEMBER NIGHT

Join us for Member Appreciation Night as we celebrate you, our members and recognize all Honorary Members!

We invite you to bring a guest or coworker who has never attended an RAB event to introduce them to the Association and our members. A light meal and hosted beer provided. Don't miss this great opportunity to catch up with others in the industry!

REGISTER

RESIDENTIAL BUILDING WORKERS’ WAGE GROWTH TRENDING DOWN

BY JING FU on JULY 14, 2023

Average hourly earnings for residential building workers* rose at a slower pace in May, after more than a year of strong gains. Wage growth has retreated below or close to 3%, from the peak rate of 2021.

According to the Bureau of Labor Statistics (BLS) report, average hourly earnings (AHE) for residential building workers were $29.87 in May 2023, increasing 2% from $29.16 a year ago. This was 14.3% higher than the manufacturing’s average hourly earnings of $26.14, 8.3% higher than transportation and warehousing’s, and 12.9% lower than mining and logging’s. Average hourly earnings for residential building workers grew at a relatively slower pace in the first five months of 2023, compared to the previous two years. The year-over-year growth rate reached 8% in October 2021, the highest rate since February 2019, but this rate is now decelerating. Indeed, the construction labor market with a peak in 2022 is now entering a stop-start cooling stage as the housing market adjusts to higher interest rates.

Note: * Data used in this blog relate to production and nonsupervisory workers in the residential building industry. This group accounts for approximately two-thirds of the total employment on residential building industry.

DBS Group Expands Team With More New Hires

Design-build construction firm DBS Group has hired Isaac Klinke as a project estimator and Colton Fox as a carpenter. The new hires reflect the company's steady growth and need for experienced professionals to meet increasing demand.

Klinke brings several years of experience in commercial construction project estimating and project management and has a bachelor's degree in project management from Bemidji State University. He joins other estimators at DBS Group, providing budget and estimating input for the financial aspects of client projects.

Fox has worked as a carpenter focusing on residential and commercial projects for the past several years. He'll be involved in the firm's self-perform carpentry services, bringing his practical expertise to bear on a variety of commercial construction projects.

"We can already see that Isaac and Colton are valuable additions to our team," said DBS Group President and CEO Chris Walters. "Not only do they have the skills we need. They also embrace our customer-first philosophy and collaborative approach to projects, where resourcefulness and doing the right thing guid e our efforts."

DBS Group is a design -build construction manager and general contractor based in Onalaska, Wisconsin, and Rochester, Minnesota. Experts in design-build project delivery in various commercial construction markets, DBS Group manages building projects from conception to completion. The company's in-house designers, and external design partners, collaborate with DBS Group's estimating and construction experts to deliver projects on time and on budget.

Klinke Fox

SEPTEMBER 16 - 17 & 23 - 24, 2023

11 AM - 5 PM

The 2023 Fall Showcase will be here before you know it! Get your latest and greatest homes, townhomes, developments, and townhome communities out in front of the public.

DEADLINES:

2nd Deadline: July 27 - $100 discount

Final Deadline: August 17

Entry information can be found HERE

Signature Event Sponsor

Now’s your chance to advertise to potential homebuyers throughout our area! Sponsorship now available for Fall Showcase of Homes and Remodelers Tour. Contact Elizabeth at Elizabeth@rochesterareabuilders.com to learn more.

Remodelers

SEPTEMBER 16 - 17, 2023

11 AM - 5 PM

Do you have a remodeling project you would like to have open to the public so they can see the finished results firsthand?

The Remodelers Tour has been created to offer you this great marketing opportunity. It’s an excellent way to gain exposure for your company and your projects.

All remodelers are eligible to participate, including designers, landscape contractors, exterior contractors, and more.

DEADLINES:

1st Discount Deadline: July 27 - $100 discount

Final Deadline: August 17

Entry information can be found HERE

The

40 BELOW HONKERS SPORTS DECK

BUILDERS EXCHANGE SUMMER SALE

Bid more and save more with the Builders Exchange Summer Sale! For a limited time, get 10% off a new membership or Plans Online upgrade—up to $85 your first year!

Already a member? Refer a new member to Builders Exchange and get a matching discount when they join.

Ready to start? Go to https://www.bexroch.com/join to download an application!

40 Below had a great turnout for their annual Honkers Sports Deck Event.

ROCHESTER AREA BUILDERS

U.S. ADDS 209,000 JOBS IN JUNE

BY JING FU on JULY 14, 2023

Job gains slowed in June, but the labor market remained solid. Total payroll employment rose by 209,000 and the unemployment rate decreased to 3.6%. In June, wages grew at a 4.4% year-over-year growth rate, down 1.1 percentage points from a 5.5% gain in May 2022.Total nonfarm payroll employment increased by 209,000 in June, following a gain of

(+24,000), and construction (+23,000) continued to trend up in June.

Employment in the overall construction sector increased by 23,000 in June, the same gain as in May. While residential construction added 10,800 jobs, nonresidential construction employment gained 12,200 jobs in June.

306,000 in May, as reported in the Employment Situation Summary. The estimates for the previous two months were revised down. The estimate for April was revised down by 77,000 from +294,000 to +217,000, while the May increase was revised down by 33,000, from +339,000 to +306,000. Despite tight monetary policy, nearly 5.2 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike. In the first six months of 2023, nearly 1.7 million jobs were created, and monthly employment growth averaged 278,000 per month. The unemployment rate decreased by 0.1 percentage point to 3.6% in June. The number of unemployed persons decreased by 140,000, while the number of employed persons increased by 273,000.

Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already holding a job, was unchanged at 62.6% in June. Moreover, the labor force participation rate for people who aged between 25 and 54 rose to 83.5%. While the overall labor force participation rate is still below its pre-pandemic levels at the beginning of 2020, the rate for people who aged between 25 and 54 exceeds the pre-pandemic level of 83.1%.

For industry sectors, employment in government (+60,000), health care (+41,000), social assistance

Residential construction employment now stands at 3.3 million in June, broken down as 929,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 2,117 a month. Over the last 12 months, home builders and remodelers have added 52,400 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,289,400 positions.

In June, the unemployment rate for construction workers decreased by 0.2 percentage points to 3.6% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic.

ROCHESTER BUILDING PERMITS

YEAR TO DATE STATISTICS

TCPA BUILDING PERMITS

OLMSTED COUNTY PERMITS YTD

OLMSTED COUNTY PERMITS

PINE ISLAND BUILDING PERMITS

BUILDER CONFIDENCE EDGES HIGHER DESPITE RISING RATE CONCERNS

BY ROBERT DIETZ on JULY 18, 2023

Low existing inventory that is keeping demand solid for new homes helped to push builder confidence up in July even as the industry continues to grapple with rising mortgage rates, elevated construction costs and limited lot availability.

Builder confidence in the market for newly built single-family homes in July posted a one-point gain to 56, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This is the seventh straight month that builder confidence has increased and marks the highest level since June of last year.

The lack of resale inventory means prospective home buyers who have not been priced out of the market continue to seek out new construction in greater numbers. At the same time, builders are troubled over rising mortgage rates approaching 7% and continue to grapple with supply-side challenges, including ongoing scarcity of electrical transformer equipment and growing concerns about lot availability.

Although builders continue to remain cautiously optimistic about market conditions, the quarter-point rise in mortgage rates over the past month is a stark reminder of the stop and start process the market will experience as the Federal Reserve nears the end of the ongoing tightening cycle.

Given that shelter inflation accounts for roughly 40% of the Consumer Price Index, the best way to ease this largest source of inflationary pressure is to build additional for-rent and for-sale housing. There has been some commentary linking gains for housing construction with increased concerns for additional inflation, but this has the economics backwards. More housing supply is good news for future shelter inflation readings in the market. Furthermore, higher interest rates increase the cost of financing for building homes and developing lots.

The July HMI survey also revealed that despite elevated interest rates, builders’ use of sales incentives has declined, as the market has firmed and resale inventory options remain limited. Only 22% of builders report cutting prices in July. This is down from 25% in June and 27% in May.

Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI index gauging current sales conditions in July rose one point to 62, the component charting sales expectations in the next six months fell two points to 60, and the gauge measuring traffic of prospective buyers increased three points to 40, the highest reading since June of last year. However, the decline for the future sales expectation reading is a reminder that housing affordability continues to be challenged by elevated interest rates.

Looking at the three-month moving averages for regional HMI scores, the Northeast increased five points to 52, the Midwest edged up two points to 45, the South increased three points to 58 and the West posted a five-point gain to 51.

The HMI tables can be found at nahb.org/hmi.

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nahb.org/nissan

WEBSITE PROFILE ENHANCEMENTS

Company Name, Address and Phone Number

Links to Website, Address, and Phone

5 Categories

Medium Placement in Search Results

Link to Profile Page

12 Categories

Company Description (200 Characters)

Keywords (240 Characters)

Hours of Operation

Driving Directions

Higher Placement in Search Results

Company Description (1600 Characters)

Keywords (Unlimited Characters)

200 Characters on Search Results

Bulleted List with Hyperlinks

Logo on Profile Page Can Be Added

Search Results Summary (200 Characters)

Profile Page Header Can Be Added

Gold Map Pin

Logo On Search Results Can Be Added

Social Networks Can Be Added

Photo Gallery Can Be Added

YouTube Video Can Be Added

Contact Elizabeth for more information

Reach Qualified Customers

Advertise on the RAB Website!

More than 3,000 people visit the RAB website each month, many of them looking for a contractor. Advertise on our site and reach them when they’re primed to buy! Banner ads are available in a variety of locations on the RAB site, from job posts to the contractor directory. Higher tiers come with priority placement in directory search results too. Contact us today to learn how you can start advertising, starting at $299.

Contact Elizabeth Elizabeth@RochesterAreaBuilders.com or 507-282-7698

FOUNDATIONS NEWSLETTER ADVERTISING

Rochester Area Builders Newsletter is an unbeatable opportunity to advertise to members and individuals associated with RAB. It is a source of valuable association and industry information, and is published and emailed monthly. Foundations is sent to over 1600 connected industry professionals. Ad sizes are listed under Display Ad Dimensions, and prices are located above. Ads may be changed from month to month.

Our prices are for full color ads. We will gladly work with you to design your ad. Please send digital files for all ad copy, logos, and artwork. We use PC format. We accept Illustrator and Photoshop files. Convert all fonts to outlines. We also accept the following high resolution file types: .tif, .eps and .pdf (with all graphics and fonts embedded). If you have any other formats please contact us.

RETURN TO: ROCHESTER AREA BUILDERS

Shelly Bahlmann

Shelly@RochesterAreaBuilders.com

108 Elton Hills Ln NW

Rochester, MN 55901

507-282-7698