FOUNDATIONS DECEMBER - JANUARY

DEC 2021 - JAN 2022

December 2021 September November October August June July 2021 2021 2021 2021 2021

ROCHESTER AREA BUILDERS, INC.

2021

Joh Elizabe

Rebeka Shey EDUCATION REGISTRATION OPEN

SHOWCASE OVERALL SPONSORSHIP AVAILABLE

HOME SHOW RESOURCE WAY REGISTRATION

9

13

16

D C

DEVELOPMENT COUNCIL a division of the Rochester Area Builders, Inc.

C OMMERCIAL C B UILDERS

OUNCIL

a division of Rochester Area Builders, Inc.

2 | DECEMBER 2021 - JANUARY 2022

STAFF EXECUTIVE DIRECTOR

John Eischen, John@RochesterAreaBuilders.com STAFF Shelly Bahlmann, Shelly@RochesterAreaBuilders.com

Golf Outing, Sporting Clays, Home Show, Directory, Newsletter, RAB Update

Online Permit Submission

UPDATE!

Rebekah Fierst,

Rebekah@RochesterAreaBuilders.com Ambassadors, Awards, Builders, Bags & Brews, Commercial Builders Council,

Community Relations,

Education, Membership, Fashion Show,

Program, Remodelers Council,

Executive & Remodelers Tour, 40 Below

Elizabeth Sullivan-Burton, Elizabeth@RochesterAreaBuilders.com

Builders Exchange Trustees and

Showcase Committee, Website GOVERNMENT & PUBLIC AFFAIRS CONSULTANT Rick Dold, Rick@GodwinDold.com

When submitting your permit online doing the following will greatly improve your chances of acceptance, speedy processing, and approval.

BOARD OF DIRECTORS

a.

Optimizing the plan allows the city departments to more effectively process your submittal within the system.

b.

Optimizing the plan will also improve the City’s ability to efficiently review your plans.

PRESIDENT

Luke Stier, Stier Construction, Inc. VICE PRESIDENT Becky Holmen, Haley Lighting SECRETARY

Jennifer Mitchell, Edina Realty TREASURER

Jesse Buhl, MedCity Consulting PAST PRESIDENT

Alissa Moe, Bremer Bank DIRECTORS

Adam Giannini, Meyer Borgman Johnson Jennifer Lawver, ERH Developing, Inc. Tom Leimer, Knutson Construction Jason Scrimshaw, Kimley-Horn & Associates, Inc. Charlie Sweeney, Kraus-Anderson Construction Melissa Barbour, TLS Companies, LLC Megan Gallagher, Solar Connection

BUILDERS EXCHANGE COUNCIL CHAIR

Kurt Hoeger, United Rentals

COMMERCIAL BUILDERS COUNCIL CHAIR Jim Oeltjenbruns, F&M Community Bank DEVELOPMENT COUNCIL CHAIR Hal Henderson, HGA Architects & Engineers

1. Use your PDF software to optimize your plan before submitting

2. Only submit one Drawing per permit that includes all building and site plan information

a.

The drawing should include the mechanical and plumbing information.

b.

Any other plan information you submit should be submitted as additional information and not as a drawing.

c.

You are allowed as much information as you need for your submittal, but each submittal should only have one drawing.

d.

Submitting more than one drawing may cause the rejection of your submittal.

e.

In the event your submittal is not rejected with more than one drawing, having more than one drawing results in multiple approvals within each which delays the process and approval of your application.

Use the link below to check the status of permits filed with the City of Rochester Agency Counter: https://rochestermn.agencycounter.com/m/home

REMODELERS COUNCIL CHAIR

Kailee Klevan, Beyond Kitchens 40 BELOW CHAIR Katie Olson, Kimley-Horn & Associates, Inc. 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 Jean DeWitz, DeWitz Home Builders, Inc. (Rep) Kathy Einck, Maplewood Homes.LLC John McGuine, JM Consulting Dan Severson, Dan Severson Builders, Inc.,

Kenneth Bush, Bush Companies

MISSION STATEMENT 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.

3 | FOUNDATIONS NEWSLTR

9 14 PERMIT REPORTS

13 UPDATE..............................................................2

Online permit update

RAB CALENDAR...................................................4

December 2021

LETTER FROM RAB PRESIDENT............................5

Luke Stier, Stier Construction, 2021 RAB President

MEMBER REPORT................................................6

Welcome New Members

2022 CALENDAR..................................................7 RAB Events

NAHB EYE ON HOUSING.......................................8

Inflation Surges in November

EDUCATION.........................................................9

Registration Information

RAB HOLIDAY PARTY....................................10-11

Photo Recap

SPRING SHOWCASE...........................................13

Ad Rate Sheet for Magazine

40 BELOW....................................................14-15 Holiday Party & Community Outreach

COMMUNITY DEVELOPMENT..............................15

Online Permit Process

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26

HOME SHOW................................................16-17

Booth Registration Information & Resource Way

PRESS RELEASE................................................20

Disadvantaged Business Enterprise certification workshop

PRESS RELEASE................................................21

Building Strong Communities

PRESS RELEASE................................................24

A.B. Systems Names New President

MN DEPT OF LABOR & INDUSTRY.......................25

MN OSHA Vaccination Testing Standard

BUILDING PERMITS...........................................26

Rochester, Byron & Pine Island

OLMSTED BUILDING PERMITS ...........................27

November 2021

SEMR HISTORICAL OVERVIEW............................27 October 2021

NAHB EYE ON HOUSING.....................................28 One in Four New Homes are Infills or Teardowns in Older Neighborhoods

NAHB EYE ON HOUSING.....................................30

Paint, Steel, and Services Prices Set Record

4 | DECEMBER 2021 - JANUARY 2022

January 2022 Sunday

Monday

Tuesday

Wednesday

Thursday

Friday

Saturday 1

2

3 12:00 PM Government Affairs Committee

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4 8:00 AM Remodelers Council Exec.

7:30 AM CBC Executive Committee

11:30 AM Executive Committee

12:00 PM Showcase Committee

10 3:30 PM Builders Exchange Board of Trustees

16

11 3:00 PM Board Meeting

11:30 AM Fashion Show Committee

12

18 4:30 PM 40 Below Exec Committee

24

13 14

11:30 AM Home Show Committee

5:00 PM General Membership Meeting

12:00 PM Ambassadors Committee

20

21

22

27

28

29

7:30 AM Membership Committee HOME SHOW NAME BADGE DEADLINE

26

3:00 AM Development Services Advisory Committee

15

ONLINE OR IN-PERSON Haley Comfort Systems

7:00 AM UDC Update #3

7:00 AM Green Building Seminar

8

8:00 AM

19

25

7 DEADLINE TO REGISTER TO BE A SEMINAR SPEAKER AT THE HOME SHOW

11:30 AM Program Committee

7:30 AM Green Building Committee

5:30 PM 40 Below Holiday Party

30

6

DEADLINE TO 7:30 AM REGISTER FOR Golf Outing JAN. 14TH Committee EDUCATION CLASS

17

23

5

11:30 AM Community Relations Committee

31

MEETINGS ARE NOW BEING HELD IN PERSON UNLESS NOTIFIED DIFFERENTLY BY JOHN

5 | FOUNDATIONS NEWSLTR

FROM THE PRESIDENT

LUKE STIER President

Rochester Area Builders, Inc Fellow members, As I write my final letter and reflect on the year, I realize what we have accomplished within this great organization. There is no doubt, 2021 was a mixed bag, and a year packed full of challenges and uncertainty. It has changed the way we do things within our building industry. We have had to adapt and

prepare for the unexpected. We witnessed a spike in lumber prices that soared well above any of our expectations. The high demand for housing continued, amidst the lack of affordability and shortage of labor. Product availability now plays a leading role in what we choose to live with or without. Through these challenges, we are fortunate to have Rochester Area Builders, Builders Association of Minnesota, and National Association of Home Builders advocating and working on these issues for us at the local, state, and national level. These three organizations are out there working for you, and they are there because of you. Your membership and involvement within these organizations strengthen and promote a successful future for our building industry. We need them, just like they need us!

I also want to express how grateful I am to have had the involvement I did this year. I learned a ton attending the government affairs and executive meetings, and it was highly informative to get an inside look at what these members are working on. Another highlight of the year was hearing from Executive Director Grace Kelliher of BAM at a special meeting, where she informed us of some of their monumental achievements at the Capitol.

When you hear first-hand and learn about the

details and challenges these individuals face every day, it makes you feel fortunate they are on our side!

The Annual Home Show is fast approaching! This is always a fantastic opportunity for our members to connect with potential customers and for the community to connect with a trusted contractor. We are also excited that this year will be a bit different as all exhibitors will be in the ballroom area.

There’s still time to register for a booth, so be sure to reach out to the RAB office if interested. Event will be held at Rochester Civic Center Feb 4-6th.

In closing, I want to extend my gratitude for trusting me to lead the organization this year.

We have a lot of great members that work extremely hard and put in valuable time that benefits us all. This does not go unnoticed! I am excited for 2022 as we welcome our incoming President, Becky Holmen. I believe she will do wonderful things, and we can be confident with her leading us through 2022!

Congratulations Becky!

Luke Stier Stier Construction 2021 RAB President

6 | DECEMBER 2021 - JANUARY 2022

ROCHESTER AREA BUILDERS, INC.

MEMBERSHIP REPORT November 2021 Membership Total: Retention rate:

403 94%

WELCOME

DECEMBER 2021 MEMBERS

As of November 30, 2021 ONE TO FOUR YEARS DBS Group, LLC................................................2020 Laketown Electric Corp...................................2020 Nicole Pierson Design.....................................2019 Ellingson Companies.......................................2017 MetroNet...........................................................2017 Realty Edge Team............................................2017

FIVE TO NINE YEARS Houston County EDA...................................................2016 Bolton & Menk, Inc.......................................................2015 CarpetsPlus of Rochester..........................................2013 Valor Mechanical, Inc...................................................2012

TEN TO 19 YEARS Advantage Cabinets, Inc.............................................2010 CRW architecture + design group, inc....................2010 Kitchens Plus.................................................................2010 RSP Architects...............................................................2010 Adamson Motors..........................................................2007 American Engineering Testing, Inc..........................2007 Brooks Excavating Company, Inc.............................2007 Byrne Electric, Inc.........................................................2007 Luxury Bath Remodeling............................................2007 Paape Energy Services...............................................2007 Pearson Builders, Inc..................................................2007 Prehn Building Sales, Inc...........................................2007 Rochester Chevrolet Cadillac....................................2007 Summit Fire Protection Company...........................2007 Total Electric of Rochester, Inc..................................2007 Traditional Wood Builders.........................................2007 Viking Automatic Sprinkler Company....................2007 Tri-State Insulated Concrete Forms........................2004 Maplewood Custom Homes......................................2003 Veit Companies.............................................................2002

Spring 20 YEARS & MORE

MLT Group........................................................2001 Widseth.............................................................2000 Creative Hardwood Floors.............................1999 Master Builders, Inc........................................1999 Rochester Plumbing & Heating/ Roto Rooter.......................................................1996 Viking Electric..................................................1996 Stonebridge Builders, LLC.............................1994 Basement Water Control................................1991 Thompson’s Garage Door and Openers........1991 Tamarack Materials, Inc.................................1989 Kuntz Electric, Inc............................................1984 Superior Mechanical.......................................1984 iHeartMedia......................................................1983 K&M Glass Company.......................................1982 Pella Windows & Doors..................................1978 RSM US LLP.....................................................1976 Short Elliott Hendrickson Inc. (SEH).............1976 Hiller’s Flooring America...............................1963 Leitzen Concrete Products, Inc......................1960

LARRY SERNICK

Building Materials Manufacturer (651) 233-6368 certainteed.com

JON ESPY

Concrete Repair (507) 218-8380 foam-lift.com

Save The Date!

April 23-24 April 30-May 1, 2022

7 | FOUNDATIONS NEWSLTR

Rochester Area Builders 2022 Calendar of Events

JANUARY

14 Continuing Education Classes (ONLINE or In-person)

25 General Membership Meeting @ DoubleTree

FEBRUARY

4-6 Rochester Area Builders Home Show

8-10 NAHB International Builders Show – Orlando, FL

18 Continuing Education Classes (In-person)

22 Networking Night @ J.F. Ahern Company

MARCH

29 Networking Night @ ISG

APRIL

TBD BAM Building Industry Day at the Capitol

23-24 Spring Showcase of Homes

30 Spring Showcase of Homes

26 Networking Night @ Premier Bank

MAY

1 Spring Showcase of Homes

30 Office Closed – Memorial Day

JUNE

2 RAB Golf Outing @ Willow Creek Golf Course

28 Networking Night @ Knutson Construction

JULY

4 Office Closed for Independence Day

TBD NAHB Mid-Year Board Meeting – TBD

26 Member Appreciation Night @ Mayowood Stone Barn

AUGUST

13 Builders, Bags & Brews @ LTS Brewing Company

30 Networking Night @ TBD

SEPTEMBER

5 Office Closed – Labor Day

15 Sporting Clay Shoot

17 Sporting Clay Youth Shoot 17-18 Remodelers Tour

17-18, 24-25 Fall Showcase of Homes

27 General Membership Meeting @ DoubleTree

OCTOBER

13 Studs, Struts & Stilettos @ Mayo Civic Center

25 Networking Night @ Elias Construction

NOVEMBER

TBD Past Presidents Dinner

24-25 Office Closed – Thanksgiving Holiday

DECEMBER

2 Holiday Party @ The Hilton

23-26 Office Closed – Christmas Holiday

FUTURE DATES International Builders Show January 31 – February 2, 2023 @ Las Vegas, NV RAB Home Show February 3-5, 2023 @ Mayo Civic Center

8 | DECEMBER 2021 - JANUARY 2022

Inflation Surges in November

BY JING FU on DECEMBER 10, 2021

In November, consumer prices increased by 6.8% from a year ago. It marks the largest year-over-year gain since June 1982. Supply-chain constraints and strong consumer demand related to the pandemic and the reopening of the economy have contributed to recent price increases in some sectors.

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.8% in November on a seasonally adjusted basis, following an increase of 0.9% in October. Excluding the volatile food and energy components, the “core” CPI increased by 0.5% in November, after a 0.6% increase in October. In November, the price index for a broad set of energy sources increased by 3.5% in November, after a 4.8% increase in October. Gasoline (all type) rose by 6.1% in November, the same increase as in October. It marks its sixth consecutive monthly increase. The food index rose by 0.7% in November as the index for food at home increased by 0.8%.

Like last month, most component indexes increased in November. The indexes for apparel (+1.3%), shelter (+0.5%), airline fares (+4.7%), used cars and trucks (+2.5%), and new vehicles (+1.1%) showed sizeable monthly increases in November. The index for major appliances rose by 2.4% in November, after a 0.9% decline in October. Meanwhile, the indexes for motor vehicle insurance, recreation, and communication all declined in November.

The indexes for owners’ equivalent rent (OER) and rent of primary residence (RPR) both increased by 0.4% over the month. Monthly increases in OER and RPR have averaged 0.4% over the last three months.

During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 6.8% in November, following a 6.2% increase in October. The “core” CPI increased by 4.9% over the past twelve months, following a 4.6% increase in October. The food index rose by 6.1% and the energy index rose by 33.3% over the past twelve months.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components).

The Real Rent Index decreased by 0.1% in November, after a decrease of 0.2% in October. Over the first eleven months of 2021, the monthly change of the Real Rent Index was -0.2%, on average.

9 | FOUNDATIONS NEWSLTR

2022 CONTINUING EDUCATION Residential Building Contractors & Building Officials

JANUARY 14TH ONLINE OR IN-PERSON 8AM-4PM

FEBRUARY 18TH IN-PERSON ONLY

8AM-4PM Haley Comfort Systems 3708 N Broadway Ave, Rochester MN

DEADLINE FOR REGISTRATION: JANUARY 11, 2022

Haley Comfort Systems 3708 N Broadway Ave, Rochester MN

DEADLINE FOR REGISTRATION: FEBRUARY 15, 2022

REGISTRATION INFORMATION AVAILABLE HERE EDUCATION SPONSORS:

RAB MEMBERS $89 / 7 Hour Course

NON MEMBERS $109 / 7 Hour Course

Questions Contact Rebekah 507.282.7698 Rebekah@RochesterAreaBuilders.com

LOCATION SPONSOR:

10 | DECEMBER 2021 - JANUARY 2022

Thank You to everyone who ventured out in the winter snowstorm to attend our 80’s themed Holiday Party! The 80’s attire was spot on! Congratulations to our winners for Best Dressed, Bret & Liza Bender, and Best Hair, Tammy Anderson.

11 | FOUNDATIONS NEWSLTR

12 | DECEMBER 2021 - JANUARY 2022

Wishing the Rochester community a

Happy New Year!

We look forward to new sparks of creativity, passion, and growth in 2022!

Architecture + Engineering + Environmental + Planning | ISGInc.com

13 | FOUNDATIONS NEWSLTR

Spring Showcase Of Homes Overall Sponsorship Available!

Contact Elizabeth For More Information!

2022 SPRING SHOWCASE OF HOMES MAGAZINE ADVERTISING INVESTMENT Sixth Page Quarter Page Half Page Half Page Back Page Full Page Inside Front Page

2.333 x 4.875 ......................................... $500 3.625 x 4.875 ......................................... $700 (v) 3.625 x10 .......................................... $900 (h) 7.5 x 4.875 ........................................ $900 8.5x11 (bleed size 8.75 x 11.25) ............. $1000 8.5x11 (bleed size 8.75 x 11.25) ............. $1200 8.5x11 (bleed size 8.75 x 11.25) ............. $1500

The 2022 Spring Showcase of Homes features new homes, townhomes, and subdivision. The Rochester Area Buildersproduced magazine is the official program that includes details, descriptions, and photos for each home/subdivisions.

Participation is exclusive to RAB members, and members of the community are invited to enjoy the event.

The digital magazine produces over 10,000 impressions, and the RAB Events app receives over 33,000 views during the event weekends. Limited printed copies will be available at showcase entries during showcase hours. RAB will promote the

Spring Showcase of

digital magazine across multiple digital platforms with over 500,000 impressions. RAB has contracted with Tulip Tree Studios for ad sales and design services. For more information on how to advertise in our digital magazine, contact Crystal at 507-218-8401 or at Crystal@tuliptree-studios.com.

Spring Showcase Weekends April 23-24 & April 30-May 1, 2022 Advertising Deadline: Thursday, March 10, 2022 Publication Date: Thursday, April 21, 2022

14 | DECEMBER 2021 - JANUARY 2022

40 Below Tuesday, January 18th 5:30pm Bowlocity 2810 N Broadway Ave, Rochester

Registra�on deadline - January 13th Join us at Bowlocity for bowling, laser tag, arcade games and pizza! We'll have lanes reserved for bowling in the Suite on the north side of the building.

Special prizes awarded to our bowlers!

15 | FOUNDATIONS NEWSLTR

FORTY

RAB

Thank you to our 40 Below members who volunteered their time at the Two Rivers Habitat for Humanity Gift Wrapping Booth in Sam’s Club this month!

BELoW CONNECTING. BUILDING. ENGAGING.

16 | DECEMBER 2021 - JANUARY 2022

RESOURCE WAY

Advertise your company and increase your company’s visibility by being part of the Resource Way at the Rochester Area Builders Home Show February 4th - 5th - 6th, 2022

We want to give you another way to show the public what sustainable products and services you offer.

Green drapes for your booth space, to visually set you apart Your company name and booth number in a special section in the Home Show Handout and on the RAB website Company logo on the passport found in the printed handout provided at the entrance of the Home Show. Attendees who visit the booths of all companies in the Resource Way can be entered into a drawing by returning their completed passport to the RAB Booth.

Products and services offered must be sustainable, energy efficient, or in some way related to green building.

The Green Building Committee will review all entries to determine eligibility.

If you would like to participate, please fill in the information below and return to the RAB office.

GO GREEN Name:

Email:

Company: Describe how your product/service is Energy Efficient/Sustainable:

$200 will be invoiced to your company.

Email: Shelly@RochesterAreaBuilders.com

Office: 108 Elton Hills Lane NW, Rochester

17 | FOUNDATIONS NEWSLTR

ROCHESTER AREA BUILDERS HOME SHOW

FEBRUARY 4, 5, & 6, 2022

Remodelers

TO THE

FaShowll of

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SIGN

AT EVE URE SPO NT NSO R

Sprin Sh of owcase

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RU TS S, ST TO S ST UDST ET &

ALL BOOTHS ON ONE FLOOR!

Date Night!

FRIDAY

2 for 1 Admission Cooking Demo with Celebrity Chef Shari Mukherjee

FAMILY FUN DAY SUNDAY

The first 250 Children will have the opportunity to put together a birdhouse to take home, sponsored in part by Kruse Lumber.

CASH BAR FRIDAY • SATURDAY • SUNDAY SUNDAY • BLOODY MARY BAR

RESERVE YOUR BOOTH TODAY! Registra�on and Exhibitor Informa�on can be found HERE.

Contact Shelly with ques�ons

Event Sponsor

18 | DECEMBER 2021 - JANUARY 2022

B:9.25" T:9" S:8"

GET UP TO $5,400 TO GET THE JOB DONE Shown with equipment from independent suppliers which is not covered by the GM New Vehicle Limited Warranty.

GM is not responsible for the safety or quality of independent supplier alterations.

USING THE PRIVATE OFFERS1 FOR NAHB MEMBERS IS EASY:

1. Get your NAHB proof of membership.

2. Visit your local Chevrolet, Buick or GMC dealer and mention this Private Offer.

3. Select an eligible vehicle(s) to purchase or lease and present your NAHB proof of membership.

For even more value, combine this offer with the National Fleet Purchase Program and Business Choice Offers. For full details on the Private Offer, NAHB members should visit nahb.org/gm.

Example offer for NAHB members who are business owners purchasing a 2021 Chevrolet Silverado 2500 HD Crew Cab 1LT 4WD. Up to

Up to

Up to

$1,000 + $3,400 + $1,000 = $5,400 Private Offer 1

National Fleet Purchase Program (FVX)2

Eligible Accessory Cash Allowance3, 4

In Potential Value

1 Private offer amount varies by model; up to $500 offer for retail delivery and up to $1,000 offer for fleet deliveries. Valid toward the purchase or lease of eligible new 2020, 2021 and 2022 model year vehicles. Customer must take delivery by 1/3/2022. Not compatible with some other offers. Not valid on prior purchases. Excludes all Cadillac vehicles; 2020 Buick Cascada, LaCrosse, Regal and Verano; Chevrolet Colorado 2SA, Sonic, Trax, Volt and GMC Canyon 2SA; 2020-2021 Encore 1SV; Chevrolet Blazer, Camaro, Corvette, Equinox 1SM, Malibu 1VL, Traverse 1L0; GMC Acadia 1SV and Terrain 2SA. Additional GM models may be excluded at GM’s sole discretion. See dealer for details. 2Offer available to qualified fleet customers through 1/3/2022. Not compatible with some other offers. Take delivery 1/3/2022. See dealer for details. 3To qualify, vehicle must be used in the day-to-day operations of your business and not solely for personal/ non-business-related transportation purposes. Must provide proof of business ownership. For complete program requirements, including information regarding offers, vehicles, equipment, options, warranties and ordering, consult your dealer or visit gmbusinesschoice.com. 4Eligible purchases must be equal to or greater than the amount of the cash allowance. Accessory Cash Allowance requires purchase of the eligible accessories from your dealer.

©2021 General Motors, LLC. All rights reserved. The marks appearing in this ad are the trademarks or service marks of GM, its subsidiaries, affiliates or licensors.

360 West Maple Road • Birmingham • MI • 48009 • 248-203-8000

19 | FOUNDATIONS NEWSLTR

20 | DECEMBER 2021 - JANUARY 2022

FOR IMMEDIATE RELEASE Liz Stay, Digital Communications Coordinator Direct: 507-328-2010 | E-mail: estay@rochestermn.gov FOR IMMEDIATE RELEASE Free Workshop for Women, Minority and Veteran-owned Businesses or Companies Located in Economically Disadvantaged Counties to Apply for Disadvantaged Business Enterprise Certification December 16, 2021 – Rochester, Minnesota – The City of Rochester and Destination Medical Center, partnering with the Minnesota Departments of Administration Office of State Procurement and the Minnesota Department of Transportation Office of Civil Rights, are hosting a workshop to help Disadvantaged Businesses Enterprises (DBEs) and Targeted Group/ Economically Disadvantaged/Veteran-Owned (TG/ED/VO) companies apply for certification.

Small businesses are encouraged to participate in the certification application workshop on Thursday, February 10, 2022 from 9 a.m.–12 p.m. The workshop will also be offered virtually and in-person. Computers will be available for in-person attendee’s, with social distancing and mask requirements. The in-person workshop is hosted by Small Business Development Center at Rochester Community and Technical College in Heintz Center, 1926 College View Rd SE, Rochester, in Room H1317. Benefits of certification include preference when bidding as a prime contractor, free business development training through Procurement Technical Assistance Program (TG/ED/VO) and IMO Consulting (DBEs) and listings in directory databases where contractors search for eligible bidders.

“We want more locally-owned DBEs bidding as prime contractors and included as subcontractors on City of Rochester and Destination Medical Center professional services and construction projects,” says Jorrie Johnson, City of Rochester Targeted Business and Workforce Participation project manager. She recommends, “Entrepreneurs interested in starting a construction company should seek business planning services and then apply for certification when they are established.”

Pre-registration is required by Monday, February 7, 2022 to attend on February 10, 2022 inperson workshop to allow accurate preparation for social distanced accommodations. To register for the workshop contact Orlanda Klinkhammer at orlanda.klinkhammer@state.mn.us. A checklist of documents will be provided for participation. Individuals who need reasonable accommodations to participate for this event may contact Janet Miller, MnDOT Equity & Diversity Office, janet.rae.miller@state.mn.us. #

#

#

21 | FOUNDATIONS NEWSLTR

Program that Focuses on Training Women, People of Color and Veterans for Careers in the Union Building and Construction Trades Expanding to Southeastern Minnesota Rochester, Minn. The Minnesota Building and Construction Trades Council recently announced the expansion of Building Strong Communities (BSC), a multi-trade, building and construction apprenticeship readiness program into southeastern Minnesota. This is the first statewide apprenticeship readiness program designed to recruit and prepare women, people of color and veterans for a career in the building and construction industry. As part of the BSC expansion statewide, programming will begin in southeastern Minnesota in 2022.

“We are very excited to bring the Building Strong Communities program to southeastern Minnesota,” said Joe Fowler, President of the Minnesota Building and Construction Trades.

“Building Strong Communities is a unique program that recruits women, people of color and veterans into building and construction trades with the goal of identifying a trade that participants can turn into a life-long career.”

The BSC program prepares participants for construction industry careers by providing access to union-endorsed training and opportunities for participants to gain real experience and exposure to union building and construction trades. Training and online classes are hosted by North Hennepin Community College.

“As we move into 2022 and the years ahead, the City of Rochester Public Works Department plans to build and maintain a diverse workforce,” said Director of Public Works Wendy Turri.

“The expansion of the Building Strong Communities program into Southeast Minnesota is a promising step toward increasing the number of trained women, people of color and veterans for construction trades careers and positions with the City of Rochester Public Works Department.”

Jinny Rietmann, Executive Director of Workforce Development, Inc. shared, “Workforce Development, Inc. is excited to partner with Building Strong Communities. We look forward to bringing additional trades and construction training opportunities to individuals in Southeast Minnesota as this will not only address workforce challenges but will also increase diversity in this key industry sector.”

Building Strong Communities started as a partnership between the Minneapolis Building and Construction Trades Council, Met Council and several metro area community based organizations. Last season the program expanded to include Duluth and the St. Louis County area. It will now be an official labor management 501c3 organization directed by industry professionals. This will allow the program to provide statewide opportunities. To learn more about Building Strong Communities visit buildingstrong.org ###

22 | DECEMBER 2021 - JANUARY 2022

Wishing you and yours a Happy and Prosperous New Year!

From,

www.bankonONB.com

23 | FOUNDATIONS NEWSLTR

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

Newsletter Advertising Rates

Per Issue

12 Issues

New Member 12 Issues

Full color 1/2 Horizontal

c $70.00

c $650.00

c $490.00

Full color Full Page

c $90.00

c $900.00

c $675.00

Full Color Full Page Press Release

c $25.00

Newsletter Display Ad Dimensions 1/2 Horizontal Full

8-1/2 x 5-1/2 8-1/2 x 11

Send artwork to Shelly@RochesterAreaBuilders.com by the 15th of the month to be included in the upcoming Foundation Newsletter.

24 | DECEMBER 2021 - JANUARY 2022

PRESS RELEASE: NEW EMPLOYEE For Immediate Release Contact: Terri Broadwater

A.B. Systems, Inc. Welcomes New Company President Rochester- December 20, 2021, A.B. Systems, Inc. names Nels Pierson as President.

“We are energized and thrilled by the addition of Nels Pierson. His knowledge and background enhance our experienced team,” said Peter Schuller, Chairman of A.B. Systems, Inc. Positive Customer Impact Nels Pierson brings to A.B. Systems his real-world application of construction methods through his years of development and real estate experience. “No matter what a business, nonprofit, or worship space might need, A.B. Systems can provide design build construction methods as well as value-engineering that will be effective for our clients,” said Pierson.

Pierson is a 1995 graduate of Gustavus Adolphus College as well as a 2012 graduate of Hamline University School of Law. In addition, Pierson presently serves as a State Representative in House District 26B. He joins A.B. Systems as the company prepares to celebrate its 50th anniversary. A.B. Systems was incorporated in 1972 by brothers Karl and Peter Schuller. The company is 49% owned by employees through its Employee Stock Ownership Plan (ESOP). Since 1972 A.B. Systems has constructed over 12 million square feet of commercial building space in over 2000 jobs for such notable companies as Viracon, McNeilus Steel, Alumacraft, Wells Fargo, Hormel, Pepsi-Cola, Fed-Ex, Rochester Medical, Halcon, West Bank, and Tom Kadlec Honda.. ###

25 | FOUNDATIONS NEWSLTR

Minnesota OSHA to adopt OSHA COVID-19OSHA Vaccination and Testing Minnesota OSHA tofederal adopt federal COVID-19 Emergency Temporary Standard Vaccination and Testing Emergency Temporary Standard Dec. 21, 2021

The U.S. Court of Appeals for the Sixth Circuit dissolved the Fifth Circuit's stay of the COVID-19 Dec. 21, 2021 Vaccination and Testing Emergency Temporary Standard (ETS) on Dec. 17. The ETS, which was Thepublished U.S. Courtinofthe Appeals forRegister the SixthonCircuit dissolved Fifth Circuit’s stay of the Vaccination Federal Nov. 5, requiresthe employers with at least 100COVID-19 employees to that employees get vaccinated against or mandate that employees vaccinated andmandate Testing Emergency Temporary Standard (ETS) onCOVID-19 Dec. 17. The ETS, which was publishedget in the Federal or submit to weekly testing and wear face at work. to mandate that employees get Register on Nov. 5, requires employers with at coverings least 100 employees vaccinated against COVID-19 or mandate that employees get vaccinated or submit to weekly testing and wear As a state plan, Minnesota OSHA (MNOSHA) must adopt this standard as written or an equivalent face coverings at work. standard that is "as effective as" this standard to protect workers in Minnesota. To meet these MNOSHA isOSHA preparing to adopt theadopt ETS bythis reference as Jan. 3, equivalent 2022. The ETS wil be As aobligations, state plan, Minnesota (MNOSHA) must standardasassoon written or an standard immediately Minnesota as of theworkers date ofinitsMinnesota. publicationToinmeet the State thateffective is “as effective as” thisinstandard to protect theseRegister. obligations, MNOSHA is preparing to adopt the ETS by reference as soon as Jan. 3, 2022. The ETS will be effective immediately in MNOSHA's state plan applies to all public and private employers in the state with limited exceptions.

Minnesota as of the date of its publication in the State Register.

Federal OSHA maintains jurisdiction over federal employees working in Minnesota.

MNOSHA’s state plan applies to all public and private employers in the state with limited exceptions. Federal Effective dates OSHA maintains jurisdiction over federal employees working in Minnesota.

After it is adopted by publication in the State Register, the rule will be effective immediately. To Effective dates account for any uncertainty created by the stay, federal OSHA is exercising enforcement discretion with After it is adopted by publication in the State Register, the will ruleexercise will be effective immediately.discretion To accountwith respect to the compliance dates of the ETS. MNOSHA similar enforcement for respect any uncertainty created by dates the stay, is OSHA's exercising enforcement discretion to for to the compliance andfederal look toOSHA follow timeline.

MNOSHA will notwith issuerespect citations with requirements ETS before Jan. 10 and willdiscretion not issue citations for to the thenoncompliance compliance dates of any the ETS. MNOSHA of willthe exercise similar enforcement with respect noncompliance with thetostandard's testing requirements before Feb. 9, socitations long as for an employer is compliance dates and look follow OSHA’s timeline.

MNOSHA will not issue noncompliance reasonable, good efforts intonot compliance with the standard. withexercising any requirements of the ETSfaith before Jan.to 10come and will issue citations for noncompliance with the standard’s testing requirements before Feb. 9, so long as an employer is exercising reasonable, good faith The U.S. Court of Appeals decision dissolving the stay of the ETS has been appealed to the U.S. Supreme efforts to come into compliance with the standard.

Court. MNOSHA will react accordingly to further judicial determination as the current litigation makes way through the process.

Theits U.S. Court of Appeals decision dissolving the stay of the ETS has been appealed to the U.S. Supreme Court. MNOSHA will react accordingly to further judicial determination as the current litigation makes its way Resources through the process.

To learn more about the ETS requirements, attend one of MNOSHA's newly added informational Resources webinars Jan. 4, 11 a.m. to noon, or Jan. 7, 10 to 11 a.m. View registration information at http://www.dli.mn.gov/updates.

To learn more about the ETS requirements, attend one of MNOSHA’s newly added informational webinars Jan. 4, 11 a.m. to noon, or Jan. 7, 10 to 11 a.m. View registration information at http://www.dli.mn.gov/ Federal OSHA's ETS is currently up for public inspection and is accessible online. OSHA has also updated updates. its webpage with access to the regulatory text, fact sheets, a webinar, sample policies, frequently asked Federal OSHA’sand ETSlinks is currently upU.S. for public inspection and isand accessible OSHAControl has also updated questions to related Department of Labor Centers online. for Disease and Prevention resources.with access to the regulatory text, fact sheets, a webinar, sample policies, frequently asked its webpage questions and links to related U.S. Department of Labor and Centers for Disease Control and Prevention resources.

26 | DECEMBER 2021 - JANUARY 2022

ROCHESTER BUILDING PERMITS

NOVEMBER 2021

NEW RESIDENTIAL

2021

Single Family Dwelling

13

5,584,000

23

6,715,993

January

6

19

11

20

25

15

19

6

17

23

Townhome Dwelling

2

572,180

0

0

February

20

15

14

19

15

20

16

5

13

8

Two-Family Houses

4

917,000

0

0

March

32

29

28

30

31

44

25

27

32

35

Manufactured Home

0

0

0

0

April

29

39

25

22

33

45

40

23

19

19

Multi-Family Bldgs (Units)

0

0

0

0

May

22

27

35

19

56

43

28

27

19

26

June

32

33

47

51

41

52

38

31

21

30

July

39

39

38

29

44

45

36

26

26

25

August

38

21

60

33

47

30

31

24

17

24

September

22

22

23

27

52

35

39

12

30

20

October

23

34

35

49

25

36

29

27

28

16

November

22

26

26

23

12

41

21

47

23

19

TOTAL

285

304

342

327

381

406

322

254

245

245

VALUATION 2020

VALUATION

2012 2013 2014 2015 2016 2017 2018

EXISTING RESIDENTIAL Deck Addition

11

88,930

14

115,540

Room Addition

2

198,000

2

195,000

Porch Additions

2

28,500

3

89,698

Other Additions

0

0

3

46,180

Basement Finish

11

180,188

16

328,541

Alterations

54

1,052,251

63

893,431

Multi-Family Addition

0

0

0

0

Multi-Family Alterations

0

0

6

84,379

2019 2020 2021

December

14

22

27

42

37

33

25

34

21

TOTAL

299

326

369

369

418

429

347

289

266

245

*Total may differ as permits may have been voided.

NEW COMMERCIAL Assembly (Church)

0

0

0

0

YEAR TO DATE STATISTICS

Assembly (General)

0

0

0

0

NO.

Assembly (Restaurant/Bar)

0

0

0

0

Business

0

0

0

0

BUILDING PERMITS ISSUED TO DATE

Education

0

0

0

0

Factory/Industrial

1

300,000

0

0

Institution

0

0

1

6,800,000

Mercantile

0

0

0

0

Miscellaneous

0

0

0

0

Residential (Apartment)

0

0

0

0

Residential (Care/Assisted Living)

0

0

0

0

Residential (Care/Hotel/Motel)

0

0

0

0

Mechanical (HVAC)

Storage (General)

0

0

0

0

Mechanical (Gas Piping)

Storage (Parking Garage)

0

0

0

0

Mechanical (Fireplace)

Storage (Warehouse)

0

0

0

0

Mechanical (Hydronic)

Utility (General)

0

0

0

0

Plumbing

Utility (Private Garage)

0

0

0

0

2021 VALUATION

NO.

2020 VALUATION

3186

480,225,930

1788

324,875,705

Single Family Dwelling

214

77,112,734

206

63,339,058

Multi-Family Buildings Total Units: 395

3

48,440,000

4

17,910,000

TRADE PERMITS ISSUED TO DATE

8534

111,791,649

8880

90,158,394

Electrical

3690

51,685,578

3425

39,574,416

Electrical (Temp. Service)

TOTAL PERMITS YTD

233

97,705

252

86,175

2662

32,542,884

2365

26,128,214

609

881,479

613

874,127

302

1,507,547

284

1,239,635

161

8,230,140

152

5,287,022

1959

20,358,595

1789

16,968,905

11720

592,017,579

10668

415,033,818

EXISTING COMMERCIAL Addition

2

12,007,500

0

0

26

9,932,916

16

10,735,868

Structural Shell

0

0

2

8,500,000

“White Box”

0

0

0

0

Interior Demolition Only

0

0

0

0

Other Phased Permits

0

0

0

0

Alterations

OTHER CONSTRUCTION Business Signs

15

96,646

9

104,727

Advertising Signs

0

0

0

0

Footings & Foundations

4

3,046,000

0

0

Demolition

2

0

3

0

Information and downloads available at Rochester Building Safety Department’s website: https://www.rochestermn.gov/government/departments/building-safety/reports-building-permits/building-permits-2021

NOVEMBER 2021

PINE ISLAND

BUILDING PERMITS

NEW RESIDENTIAL

NUMBER

VALUATION

Single Family Detached

9

2,512,022.59

Single Family Attached

0

0

Basement Finish

0

0

Deck Addition

0

0

Existing Residential

27 | FOUNDATIONS NEWSLTR

OLMSTED COUNTY PERMITS YTD

2021

VALUATION

2020

VALUATION

Addition

6,770,279

44

15,205,763

Single Family-Attached

16

3,265,750

5

887,826

18

1,316,240

28

1,543,082

Deck

34

253,324

30

161,438

Addition

13

632,964

8

438,566

159

2,160,783

91

1,625,741

6

156,679

3

RESIDENTIAL

Garage Addition

ED1

ST Industrial/Warehouse OLM Church/Religious

0

RE CUR

0

0

1

422,867

Alterations

11

286,700

11

640,767

Re-roofing

1

2

8,250

235,440

0

0 236,059

3

2,985,531

Service/Repair Station

0

0

0

0

Store/Restaurant

1

336,786

1

227,304

Nonresidential Building

3

1,154,159

2

454,023

2021

2020

VALUATION $1,325,200 PERMITS 9

VALUATION $2,900 PERMITS 2

BYRON

VALUATION $4,000 PERMITS 1

LE ILAB

VALUATION $380,688 PERMITS 10

EYOTA

Manufactured AVAHomes N U ERS

MB

AT

IME3,900

T THIS

TURES

22

255,554

14

600,584

39

0

36

3,430

MISCELLANEOUS PERMITS

Mechanical

184

1,431,335

192

2,051,852

Plumbing

101

935,663

117

1,354,033

658

31,147,715

567

23,844,735

0

1

VALUATION $3,342,863 PERMITS 31

VALUATION

121,056

Pool, Retaining Wall, etc.

73,005 NU MIT

ER P T N

NEW COMMERCIAL/INDUSTRIAL Recreational

2020

1

OTHER STRUC-

Alterations

VALUATION

COMMERCIAL/INDUSTRIAL

24

Single Family-Detached Garage

2021

NEW RESIDENTIAL

NOVEMBER 2021

VALUATION $673,238 PERMITS 14

TOTAL PERMITS

BYRON NOW INCLUDED IN OLMSTED COUNTY PERMITS

OLMSTED COUNTY PERMITS NOVEMBER

VALUATION $1,406,884 PERMITS 19

MARION

VALUATION $63,547 PERMITS 10

ORONOCO TWP

VALUATION VALUATION $0 $44,114 PERMITS PERMITS 0 1

VALUATION VALUATION $1,575,453 $1,056,445 PERMITS PERMITS 30 40

QUINCY

STEWARTVILLE

Activity Overview Key metrics by report month and for year-to-date (YTD) starting from the first of the year.

Key Metrics

Historical Sparkbars

New Listings 11-2018

11-2019

11-2020

11-2021

11-2018

11-2019

11-2020

11-2021

11-2018

11-2019

11-2020

11-2021

11-2018

11-2019

11-2020

11-2021

11-2018

11-2019

11-2020

11-2021

11-2018

11-2019

11-2020

11-2021

11-2018

11-2019

11-2020

11-2021

11-2018

11-2019

11-2020

11-2021

11-2018

11-2019

11-2020

11-2021

11-2018

11-2019

11-2020

11-2021

Pending Sales

Closed Sales

Days on Market

Median Sales Price

Avg. Sales Price

Pct. of Orig. Price Received

Affordability Index

Homes for Sale

Months Supply

11-2020

11-2021

Percent Change

YTD 2020 YTD 2021

358

386

+ 7.8%

6,541

6,668

+ 1.9%

441

504

+ 14.3%

6,286

6,198

- 1.4%

528

527

- 0.2%

6,073

6,010

- 1.0%

42

32

- 23.8%

53

31

- 41.5%

$225,000

$233,750

+ 3.9%

$222,500

$245,000

+ 10.1%

$252,522

$271,783

+ 7.6%

$247,399

$276,415

+ 11.7%

97.4%

98.2%

+ 0.8%

97.7%

100.0%

+ 2.4%

197

186

- 5.6%

199

178

- 10.6%

774

647

- 16.4%

--

--

--

1.4

1.2

- 14.3%

--

--

--

Percent Change

Current as of December 4, 2021. All data from Southeast Minnesota REALTORS® and NorthstarMLS®. Provided by the Minnesota Association of REALTORS®. Report © 2021 ShowingTime. | 2

28 | DECEMBER 2021 - JANUARY 2022

One in Four New Homes are Infills or Teardowns in Older Neighborhoods

BY NATALIA SINIAVSKAIA ON DECEMBER 9, 2021 According to the latest Annual Builder Practices Survey (ABPS), one in four new single-family detached homes were built in established neighborhoods in 2020. This includes 19% of new homes that were built on infill lots and 6% that involved tearing down an old building prior to building a brand new single-family detached home. These shares vary significantly across the United States. In 2020, teardowns and infills accounted for almost half of the new-home market in New England but their prevalence in the Midwest was under 20%.

At 18.6% of the new single-family detached home market, homes built on infill lots in older neighborhoods are a substantial part of the market. The North East and Pacific stand out for registering significantly higher market shares for infill homes. In New England, more than a third (34.6%) of new single-family detached homes are built on infill lots. The market share of infills in the Middle Atlantic is almost 30%, followed by the Pacific (24.1%). At the other end of the spectrum is the Midwest, where the market share for infill homes is just above 12%. The lack of developable land is likely to boost infill development and helps explain its relatively high market share. Given the record high and growing lot shortages reported by the September 2021 survey for NAHB/Wells Fargo Home Market Index (HMI), new homes built on infill lots will likely command a growing share.

Teardowns play a smaller role in the new home market. The current market share of 6.4% is actually lower than the shares NAHB reported for teardowns in 2015 (7.7%), 2016 (10.2%) and 2017 (6.8%) based on the special questions appended to the HMI surveys at that time. The highest market share of teardowns is again in New England (14.4%), followed by the Pacific (13.4%) and Middle Atlantic (9.3%).The substantial regional differences in the market shares of teardowns reflect the diverse age of the housing stock, distinctive climate effects on housing durability, as well as varying severity of developable land and lot shortages in different regions.

The majority (63%) of new single-family detached homes built in 2020 were in new residential developments. Not surprisingly, the three divisions that stand out for the highest market shares of new homes built in existing neighborhoods build less in new developments. In the Middle Atlantic, only 38% of new single-family detached homes were built in new developments. The New England and Pacific divisions follow with 41% and 54%, respectively.

At the other extreme is the Mountain division where close to three quarters (72%) of new homes were in new residential developments.

Nationwide, the remaining 12.4% of new single-family detached homes built in 2020 were not in a residential development. This share was almost twice as high (23%) in the Middle Atlantic region. New homes built outside of residential developments were also more prevalent in the Midwest (17% – East North Central, 15% – West North Central) and East South Central division (16%).

29 | FOUNDATIONS NEWSLTR

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To support our plumbing inventory, we maintain showrooms in many of our branch locations.

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INDUSTRIAL

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30 | DECEMBER 2021 - JANUARY 2022

Paint, Steel, and Services Prices Set Records, Drive PPI for Residential Construction Inputs Higher

BY DAVID LOGAN on DECEMBER 15, 2021 The prices of goods used in residential construction ex-energy climbed 1.8% in November (not seasonally adjusted), according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. The monthly increase was driven by price increases in nearly every product category.

Building materials prices have increased 14.1% year-to-date, more than tripling the November YTD increase of the prior year (+3.9%) and well above the average YTD increase of 1.5% between 2015 and 2020. The index has climbed 2.5% over the past two months following a 1.5% decline between July and September.

The PPI of most durable goods for a given month is largely based on prices paid for goods shipped, not ordered, in the survey month. This can result in lags relative to cash market prices during periods of long lead times.

Steel mill products prices rose 2.4% in November, the smallest monthly increase since May 2021. The last monthly price decrease in steel mill products occurred in August 2020, and the index has climbed 151.4% in the months since–with more than 80% of that increase taking place in 2021.

Since the inception of the steel mill products PPI, it has doubled over four non-overlapping periods which have averaged 181 months in duration. In other words, over the last 60 years it has taken roughly 15 years for the price of steel mill products to double, on average. Given that context, the recent pace of price increases has been incredible—it took only 11 months for steel prices to double between August 2020 and July 2021.

Ready-Mix Concrete

The PPI for all inputs to residential construction–which is a weighted average of goods and services, increased 0.3% in November–has climbed 17.3% over the past 12 months, and is 22.7% higher than its prepandemic level.

Product Detail: Goods Softwood Lumber The PPI for softwood lumber (seasonally adjusted) increased 6.9% in November and has gained 16.1% since September. Once again, as was stated in last month’s PPI post, the recent trend of mill prices—which have more than doubled since late August and are up 37% over the past four weeks— suggests that the softwood lumber PPI is headed for another sizable gain in December.

wholesale and retail services indices measure changes in the nominal gross margins for goods sold by retailers and wholesalers. Gross profit margins of retailers, in dollar terms, have declined 22.1% since reaching an all-time high in June 2021 but remain 33.4% higher than the January 2020 level.

Paint

Building materials wholesale and retail indexes which together account for roughly two-thirds of the PPI for “inputs to residential construction, services.”

Steel Products

The price index of services inputs to residential construction decreased 0.8% in November, continuing a fourmonth trend during which the index has declined 10.1%.

Wholesale and retail trade services decreased 1.3% in November which more than offset price increases in transportation and warehousing (+1.0%) and services less trade, transportation, and warehousing (+0.3%). Nonetheless, the price index of services used in residential construction (excluding labor) is 13.5% higher than it was 12 months prior and 22.3% higher and 22.3% than the January 2020 reading.

In November, the PPI for gypsum products declined (-0.2%) for only the second time in 2021. Gypsum products prices have climbed 19.8% over the past 12 months and are up 18.8% in 2021—more than quadruple the largest percentage YTD increase in November since seasonally adjusted data became available in 2012.

The PPI for ready-mix concrete (RMC) gained 0.9% in November after increasing 0.1% in October. The index for RMC has risen 8.3% since January 2020 and 6.6% YTD—the largest yearto-date increase in November since 2005.

At the regional level, prices increased in the Northeast (+2.5%%) and Midwest (+4.7%) while prices fell in the South (-0.9%) and West (-1.1%) regions.

The PPIs for exterior and interior architectural coatings (i.e., paint) increased 1.5% and 0.2%, respectively, in November. Neither index has declined since January 2021.

The YTD price increases of architectural coatings is unprecedented with exterior and interior paint prices climbing 16.7% and 10.9%, respectively, thus far in 2021. In contrast, November YTD price increases averaged just 2.1% for exterior paint and 1.4% for interior paint from 2013 through 2020 (the most recent data available).

Paint prices began a series of large monthly increases in the wake of the winter storm that devastated Texas earlier this year as the petrochemical industry—upon which paint manufacturing is heavily reliant—is highly concentrated in the state.

Professional services is the third most heavily weighted category in the service inputs to residential construction PPI. The prices of legal, architectural, and engineering services rose 0.3%, 0.3%, and 0.2%, respectively, in November.

Although the year-to-date increase in prices of professional services used in residential construction are quite modest compared to that of materials, prices have increased more in 2021 than they had by November 2020; the difference is especially striking for engineering and architectural services.

Other Building Materials The chart below shows the 12-month and year-to-date price changes of other price indices relevant to the residential construction industry.

With the recent passage of the Infrastructure Investment and Jobs Act (a.k.a. the Bipartisan Infrastructure Bill), the construction materials index is particularly salient. This index, which has increased 29.1% year-to-date and 40.9% since January 2020, is more heavily weighted with products used in large amounts in the production of “traditional” infrastructure (e.g., roads, bridges, rail).

Product Detail: Services Building Materials Wholesaling and Retailing

Gypsum Products

Professional Services

The Producer Price Index for building materials wholesaling decreased 1.4% in November and the building materials retailing PPI declined 1.6%.

The

Although the difference in YTD price changes for legal services is small, the percentage increases are relatively large. This follows with a trend in recent years. Since November 2018, the price of legal services has risen 13.2%–much higher than the three-year increase in architectural (+1.7%) and engineering services (+5.9%).

Metal Treatment Services Prices of metal treatment services increased 0.7%, on average, in November.

The subset of these services used to calculate the services inputs to residential construction includes plating and polishing, coating and allied services, and heat treating.

Metal coating and allied services have increased the most— +14.1% (NSA)— since the start of 2021. Metal heat treating and plating and polishing services have increased 5.4% and 2.0%, respectively, year-to-date. The average price increase of the three services averaged 0.1% over the course of 2020.

31 | FOUNDATIONS NEWSLTR

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32 | DECEMBER 2021 - JANUARY 2022

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33 | FOUNDATIONS NEWSLTR