Author: Press Room

Nelson Presented with a Award

22 May 2023
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Small Business Administration Montana District Director, Brent Donnelly, Helena, recently came to Billings to present Wayne Nelson with Montana’s 2023 Small Business Champion of the Year. Nelson, Senior Banking Executive for Stockman Bank, is being recognized for his 25 years providing business expertise and support for entrepreneurs. Nelson was President of Stockman Bank for 15 of his 25 with Stockman Bank.

Nelson has served on the Board of Directors for Big Sky Economic Development for several terms and has referred clients to many of the programs hosted by BSED including, SBA, VBOC, SBDC, the Rock 31 Entrepreneurship program and PTAC, where they received technical assistance and access to financing.  

MSU Alumnus Wins $75K Venture Competition

22 May 2023
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A Montana State University alumnus has won the $75K Venture Competition, taking home $25,000 for his business venture. The remaining $50,000 was split between seven other finalists and seven semi-finalists. 

The annual competition was open to students, faculty, staff and alumni of Montana State University and the University of Montana. It is hosted by the MSU Jake Jabs College of Business and Entrepreneurship?and the MSU Blackstone LaunchPad. The finalists were from a diverse group of disciplines, including business, engineering, computer science, food science and healthcare. 

The winners of the 2023 $75K Venture competition are: 

* First place, $25,000: High Proof Razor Co., presented by David Ellig, which designs and manufactures high-quality and innovative shaving razors in Belgrade.  

* Second place, $15,000: MatchCoach, presented by Chase Bartlett, a coaching platform that uses artificial intelligence and technology to help tennis players access personalized remote coaching on their gameplay for fractions of the cost of traditional coaching. 

* Third place, $10,500: First Nations Foods, presented by James Vallie, which aims to create novel food products using Indigenous cultural food knowledge and modern food science technology 

The five other finalists were each awarded $3,500. They are listed in alphabetical order: 

* Feedplan, presented by Win Feigle, a subscription-based marketplace platform that connects customers with meal plans from their favorite restaurants. 

* Neurofluidic Diagnostics, presented by Zeynep Malkoç and Zach Jewett, an MSU spin-off that offers drug testing environments to detect and monitor the hallmarks of neurodegeneration linked to Alzheimer’s disease and other forms of dementia. 

* Scepter Picks, presented by Nicole Matuszynski and Jack Neupert, which is developing high-quality ice climbing picks. 

* Seidr, presented by Jay Getten, a clinical decision support system for mental health conditions that is designed to help clinicians effectively triage, assess and treat patients. 

* Telepathy Bikes, presented by Calvin Servheen and Matt Lessmeier, which creates mountain bike suspensions that absorb more trail roughness and transmit more rider power than traditional bikes. 

The finalists advanced from a semifinal round of 15 competing ventures. The ventures that didn’t make it into the final round received $1,000. 

David Ellig, founder of the winning High Proof Razor Co., graduated from MSU in 2015 with a degree in mechanical engineering. He said he was excited to win the money but also appreciated the feedback. 

“It’s really cool to get more validation from other people that have been out in the industry that think that this product and this idea has potential and can go somewhere,” he said. 

His metal razors are designed to last a lifetime with interchangeable blades. They are made at Ellig’s machine shop in Belgrade. 

He said the winnings will help fund a patent and cover some marketing expenses. So far, the company’s only marketing effort has been to provide samples to YouTube personalities to review the razors. Even so, Ellig said, his company has sold more than 1,000 razors since developing the first prototype in 2019. 

The diversity of the businesses as well as their sound business plans impressed the judges. 

“I was very impressed with the breadth of valid business opportunities as well as the depth of knowledge, preparation, and professionalism of the entrepreneurs at the $75K competition,” Nordhagen said. “The support for the entrepreneurs was also evident through the generosity of the donors who provided the seed money and the coaching that was provided by the LaunchPad team. The prizes are substantial and will really boost these ventures.” 

The MSU Jake Jabs College of Business and Entrepreneurship offers four undergraduate options of study – accounting, finance,management and marketing– as well as five minors- accounting, business administration, entrepreneurship and small business management, finance and international business. It also offers a master of professional accountancy degree, master of science in innovation and management, abusiness certificate and entrepreneurship certificate. 

MSU’s Blackstone LaunchPad helps MSU students succeed in entrepreneurship and in their careers. Open to students and recent alumni in all majors, LaunchPad provides mentoring, opportunities for participants .

Montana History on the Frontier Entrepreneur

22 May 2023
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By Lawrence Reed

 “His name was John Bozeman. His short life is a tale of frontier entrepreneurship.”

One of the most interesting exports from the state of Georgia to Montana was the namesake for the Treasure State’s fourth largest city. His name was John Bozeman. His short life is a tale of frontier entrepreneurship.

Born in 1835 in Pickens County in north Georgia, John Merin Bozeman headed west, first to Colorado and then on to Montana. It was 1860 and he was 25. I can understand. My home is an hour southwest of Atlanta, but I head to Montana every chance I get. His objective, however, was not trout. It was gold, but Bozeman proved to be a very unlucky prospector.

After failing to strike gold, Bozeman decided to, as one observer put it, “mine the miners” by selling them provisions and building wagon trails to the gold fields. The famous Bozeman Trail, running northwest from Fort Laramie through the hunting grounds of the Sioux, Crow and Northern Cheyenne Indians, was his creation. He saw it as a money-making venture, but fate had other things in mind. Harassment from the natives effectively closed it after a brief and bloody period.

In the half dozen years he lived in Montana, John Bozeman helped start the town that bears his name. According to Don Spritzer in Roadside History of Montana, “he was elected a probate judge, established a farm, and helped build the town’s first hotel.” 

Being a frontier entrepreneur in the Old West of the 1860s was more than a little risky, as John Bozeman would attest. Good fortune was punctuated by failures and even tragedies along the way. He dealt with hostile natives (perhaps not always fairly), bad weather, customers who didn’t always pay their bills on time and a host of other troubles. But such are the pitfalls of every new venture. The best entrepreneurs don’t give up the first time they run into one; instead, they learn something from every experience.

In a country whose international success owes much to remarkable men and women who stuck their necks out to build things, we Americans surely underappreciate how important entrepreneurs are. 

A society without them is a society of stagnation and decline, of monotony and impoverishment, of bureaucrats and paperwork. Why? Because entrepreneurs are consummate change agents. In places like Cuba and North Korea where they are regularly vilified and stifled, you get little change and little improvement. You just get marching orders from those in political power.

There’s nothing routine or mundane about entrepreneurship. Imagination and courage are prerequisites. Starting a new enterprise is always an adventure into the unknown. Headaches and long hours are par for the course. 

Despite college courses on the subject, it’s by no means clear that one can be ‘taught’ entrepreneurship. I’m of the school of thought that believes it’s a mysterious inner spark. It isn’t so much activated by formal instruction in the nuts and bolts of organizational administration as it is drawn out, encouraged, inspired, given room to grow. You don’t get it by absorbing a large body of facts and figures; it’s more like a set of attitudes and character traits. 

If a business is a campfire, then management and accounting are the sticks. The entrepreneurship is the initial, indispensable strike of the match. The entrepreneur is the visionary of the operation.

Entrepreneurship can be rewarded, but it can also be de-spirited and crushed. Much depends on the incentives and disincentives in society. North Korea and Cuba are loaded with managers and accountants, but few entrepreneurs. The socialist systems there communicate a powerful disincentive message: “If you build it, we will come after your profits and maybe you too. We’ll take your stuff, demonize you, and declare that “you didn’t build it anyway” as Barack Obama callously put it.

John Bozeman took two bullets to the chest and died in 1867 at age 32. The circumstances are still murky, but it’s likely that an associate named Tom Cover did the dirty deed and blamed the Indians for it. 

What a shame. Who knows what this Georgia transplant might have gone on to create and build if he had had another 32 years!

           *****

Lawrence W. Reed writes a monthly column for the Frontier Institute in Helena, on whose board he serves. He is president emeritus of the Foundation for Economic Education and blogs at www. lawrencew reed. com.

Montana Highlights May 15, 2023

22 May 2023
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After 50 years in business Bob and Cheri Hooper have sold their Kalispell Garden Center to Phil Aitken and his wife Sam. The up to 47 employees plan to stay on and continue the cold growing processes that Hoopers has developed over the years.

Two Brothers Care, operated by Nick and Esmerelda Aliu will open in the old Perkins location in Evergreen this summer. Two Brothers is named after the couples two sons, Robert and Leonardo. The family originally came from Illinois.

The new Infusion and Oncology Center at Bitterroot Health in Hamilton opened recently. Intermountain Health of Utah specialists will be communicating during their appointments via tele-health.

Over 30 people have become ill after eating at Dave’s Sushi in Bozeman in April. An ongoing investigation has found the probable cause to be morel mushrooms from China. Once the department of Health completes their investigation Dave’s plans to reopen.

Stio is a mountain lifestyle brand that’s known for its large line of versatile, technical outdoor apparel. Stio offers a line of products for all four seasons, with some 250 styles accommodating various outdoor activities. The Jackson Hole-headquartered outdoor apparel company opened in 2011. Plans are to open this fall in the Osborne building in downtown Bozeman.

Alyssa Amato and her mother Lynne Turville will open a new food truck in Sidney. Sunrise Berry Bowls will serve acai bowls which are an organic gluten free, dairy free, vegan, plant based dish. They plan to be open in mid May

The Havre Public Schools Board of Trustees has approved a modified four-day week calendar for the coming year. Adjustments to the school’s schedule can be made if it becomes necessary and that the lower grade levels will not have as long a day as the high school. Members of the board debated the effects of the calendar on transportation and sports as well as the merits and flexibility of the optional Fridays, which supporters of the calendar have said is a great opportunity for teachers to instruct in-need students in a way that is more individualized and tailored to their needs.

The Big Sky Passenger Rail Authority is holding a public meeting on May 25 at Dawson Community College.  The goal of these meetings is to bring people together from across the state to gain their input regarding the restoration of the Southern Montana passenger rail route (the former North Coast Limited/North Coast Hiawatha) and the health benefits of train transportation.

A dispute that began last year between a Navajo Nation-owned coal company that operates the Spring Creek Mine in southeast Montana and BNSF Railway, one of the largest railroad companies in the United States, has spread from a federal courthouse in Billings to Washington D.C. Navajo Transitional Energy Company filed a breach of contract lawsuit in U.S. District Court in Billings against Texas-based BNSF. The company alleged that BNSF’s preferential treatment of other mines caused NTEC to lose more than $150 million in revenue and incur more than $15 million in demurrage penalties in 2022.

The US Bureau of Reclamation announces lifting the closure of Reclamation lands on and adjacent to Joe’s Island on the south side of the Yellowstone River in Dawson County, 15 miles north of Glendive, Montana. The temporary closure was in place to ensure public safety during the construction of the Lower Yellowstone Fish Passage Project. Construction of the fish passage project was recently completed, and the land closure is no longer needed.

Of the three metro areas in Montana, Great Falls has the lowest housing costs. According to the EPI’s Family Budget Calculator, a modest two-bedroom rental in the metro area will cost an estimated $9,696 in 2022, including utilities. For context, the statewide average cost of a comparable apartment is estimated at $10,972.  Just as rents in the area are lower than the statewide average, so too, are home values. According to five-year estimates from the U.S. Census Bureau’s American Community Survey, the typical home in the metro area is worth $184,400, compared to the median home value of $244,900 across the state.

With the world facing helium shortages, news that Montana has helium resources that mining companies are exploring is good news for the economies of some of the state’s most remote areas. Two Helium drilling companies are drilling wells in the areas of Toole, Hill and Liberty counties. The activity is an extension of helium drilling that is occurring just across the Canadian border. Helium is the radioactive decay of uranium and thorium, and while it can be found everywhere, it is rare that it is found in geological formations that are capable of capturing and holding it in pockets large enough to make recovery feasible. The lighter-than-air element that gives balloons their buoyancy also powers vital medical diagnostic machines, enables the operation of superconducting magnets, and is vital to the military.

Brinkman Real Estate, a Colorado-based multifamily investment company has acquired The Highline Apartments in Columbia Falls. The purchase marks their third acquisition in Montana and the largest to date with 180 Class A units across six buildings. The company also owns properties in Billings and Missoula. Brinkman Real, in partnership with CBRE’s Institutional Debt and Restructured Finance team comprised of Brady O’Donnell, Jeff Halsey, Jill Haug, and Alex Scott led the financing execution for this asset.

American Prairie has purchased property on the eastern border of the Fort Belknap Indian Reservation in Phillips County. The 4,960-acre property comprises 3,075 deeded acres and 1,885 leased acres located south of Dodson. Approximately 1,847 of the deeded acres are under a Conservation Easement with the U.S. Fish and Wildlife Service. To be called the Wild Horse unit, the purchase brings American Prairie’s total deeded and leased property to more than 460,000 acres. 

The fastest growing city in Montana is the Missoula metro area. Its population grew by 11.3% from 2010 to 2020 to 121,630 residents. During that same time, the population of Montana grew by 9.2%. The Missoula metro area has a median annual household income of $57,347, slightly above Montana’s median of $57,153.

The fastest shrinking county in Montana is Fergus County. The county’s population declined by 4.2% from 2010 to 2020. The population of Montana overall increased by 9.2% during that same time period, and the U.S. population increased by 6.7%. Fergus County’s population declined by 486 people during the decade, from 11,590 in 2010 to 11,104 in 2020. This is due in part to negative net migration as 88 more people moved away from the county than in.

Montana DPHHS Gets Grant for Behavioral Health

22 May 2023
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Together with Department of Public Health and Human Services (DPHHS) Director Charlie Brereton, Governor Greg Gianforte  announced Montana has been selected for a grant to support the implementation of Certified Community Behavioral Health Clinics (CCBHC).

“Instead of turning our backs on those struggling with addiction, we’re investing in hope and opportunity as they get clean, sober, and healthy,” Gov. Gianforte said. “CCBHCs are another tool in the toolbox to expand access to quality mental health and substance use services for our neighbors and build safer, stronger, healthier communities.”

Montana is one of 15 states selected for a $1 million federal grant to support a 12-month planning process for the implementation of CCHBCs.

Brereton said DPHHS is proactively working with 10 community behavioral health providers to determine community readiness and behavioral health needs as the state begins the planning process. 

“Under this model, clinics in other states are closing treatment gaps by offering a comprehensive range of behavioral health services through enhanced reimbursements,” Brereton said. “There is growing demand for services in our state, but capacity of the current system is limited. This is another way that we are transforming Montana’s behavioral health system for future generations.”

The year-long planning phase assists states in developing certification criteria for CCBHCs, crafting technical assistance and training models to complete the certification, establishing a prospective payment system for Medicaid reimbursable services, and preparing an application to participate in a four-year demonstration program.

In 2024, 10 of the 15 states that received planning grants will be selected to join the demonstration project, which provides enhanced federal Medicaid reimbursement for the full cost of covered services provided by CCBHCs.

The certification requirements establish a basic level of service at which a CCBHC should operate and must follow six key program areas that include staffing, availability and accessibility of services, care coordination, scope of services, quality measurements, and consumer representation.

DPHHS will also develop a collaborative workgroup to design Montana’s certification process and related supportive training.

“We look forward to engaging clients, providers, communities, and stakeholders on the state’s grant efforts and activities,” Brereton concluded.

Memorial Day Travel

22 May 2023
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Despite concerns over inflation and rising gas and airfare costs, Memorial Day travel is projected to reach 99 percent of pre-pandemic levels. AAA expects nearly 42.3 million Americans to travel for the holiday. That’s an increase of 7 percent from 2022.“Air travel could hit an all-time high” with a 5.4%  increase says Brian Ng, Senior Vice President of Membership and Travel Marketing for AAA Montana.

House Panel Squabbles over ESG Definition, Standards

22 May 2023
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By Kim Jarrett, The Center Square

The fight over ESG policies has occurred mainly at the state level, where legislatures have passed laws banning financial companies that use ESG standards from doing business with their state. Twenty-six attorneys general, including Reyes and Marshall, sued the Biden administration over allowing companies to prioritize ESG standards when choosing retirement plans.

Reyes called ESG an “undemocratic tax” on the economy and productivity.

“I’m here to warn you about the process involved in effectuating ESG goals,” said Reyes. “No matter how much you may agree with the policy being pushed if you deconstruct the process, it is a flawed and dangerous one and may also be illegal.”

Frerichs had a different definition of ESG, calling it “data.”

“ESG is simply additional information that investment professionals use to assess risks and return prospects,” Frerichs said. “The more data we, as investors have, the better informed our decisions are when selecting investments over the long-term.”

The two parties also disagreed over the costs of ESG. Republicans said ESG-based investments did not perform well. And ESG standards, particularly when it comes to fossil fuels, drive up consumer prices.

“If you look, particularly what’s driven inflation and what’s hit Americans in the pocketbook, including Alabamians, it’s been an increased cost of energy, part of that is attributable to decreased investment in what is currently producing the energy in our country itself,” Marshall said. “But beyond that, particularly, for example, in agriculture, is going to be the attack on agriculture as it relates to their responsibility, according to the left, for increased carbon emissions. The question is going to be do we find farmers discriminated against in their banking relationships, do we see farmers discriminated against in other financial relationships that impact their ability to do their job?

Democrats said state bans on ESG investing have hurt states.

A report from The Brookings Institution released last month said Texas’ ESG policies could cost the state “$300-$500 million in additional interest on the $31.8 billion borrowed during the first eight months following the implementation of the law.”

Committee Chairman James Comer, R-Ken., said in a statement after the hearing the committee’s work on ESG was not done.

“No administration should be able to gamble with Americans’ retirements to fund its own political agenda in the private market,” Comer said. “We must expose and investigate the propriety and legality of this coordinated effort.”

Gun Sales Are in Decline in Montana

22 May 2023
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By Samuel Stebbins, 24/7 Wall St. via The Center Square

Gun sales in America, as estimated by background checks, jumped at the start of the COVID-19 pandemic and remained high until well into 2021. Several days and weeks in that period set all-time records. Total sales were 28,369,750 in 2019 and 39,659315 in 2020.

During the period of the increase, the number of first-time gun buyers jumped. First-time buyers have accounted for about 20% of new gun sales nationwide in 2020.

Recently, however, gun sales have collapsed. June gun sales last year totaled 3,054,726 nationwide. Last month, nationwide gun sales totaled 2,570,608. Compared to the first six months of 2021, there were 6.4 million fewer background checks for the purchase of a firearm, a 28.7% drop.

In Montana, gun sales are falling, but at a slower pace than the national decline. There were a total of 70,552 FBI firearm background checks in the state in the first half of 2022 compared to 85,087 in the first six months of 2021 — a 17.1% reduction and the 40th largest decline among states.

Everyone Can’t be Right

22 May 2023
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By Evelyn Pyburn

In reporting about the media misrepresentations, regarding Representative Kerri Seekins-Crowe’s experience in discussing the transgender issue of SB-99 during the state legislature, she said that after asking one reporter about why he wasn’t interested in her side of the story, he told her that while he didn’t want to lie, since the issue was “politics” he could basically “portray any truth he wants to.”

Although the statement is stunning, because he was so forthright it brought some enlightenment.

One of the most troublesome things in dealing with politics is the uncertainty one always faces in trying to decide the truth. No matter what side of the isle a politician comes from they are often masters at obfuscating the truth in self-serving ways. It’s almost a game to figure out what they aren’t saying or to untangle the words they do say.

Because of this, has media concluded that there are no rules when it comes to reporting political issues – that anything goes? A particularly troubling conclusion, since these issues are usually incredibly important.

The outspoken reporter helped to understand that maybe many in media have concluded that when dealing with politics there is no truth and its ok to report whatever feels good. Maybe this is how media has come to be so unreliable and so political itself. Rather than a source of enlightenment media has taken on the hue of politics, and one has to be wary about what to accept as solid facts—  or the greater likelihood to realize that many consequential facts are left out of the information put forth.

While life brings the lesson that for the most part everyone has their own “truth”, given that contradictions cannot exist, we must also know that not all of them are right. While I can have empathy with the wistful bromide that in life some things that aren’t true should be true, saying so doesn’t make it so.

Much of our success as individual human beings depends upon how accurately we identify truth – how well we understand reality. If it’s a reality we want to change, that’s fine, but one is not going to be successful in changing anything that is not clearly understood. 

Since there are so many different conclusions that people reach about truth, the ideal role of media is to bring as much information and ideas to the fore as possible, so each person can come to their own conclusions. To attempt to dictate truth, whether by media or anyone else, is the height of hubris – unless of course you are an individual who is never wrong.

When I am asked how to find objective information, my answer is that objective information is the responsibility of the inquiring individual. Get information from a broad range of sources. To sort through all kinds of conflicting data and distill it to what is real is the purpose of having a brain—of having the ability to reason. It is the defining characteristic of human beings. If one is counting on others to do this, good luck! That approach makes you vulnerable to serving the purpose of others—such as this reporter.

Gathering as much information as possible is our means of survival, which is why freedom of speech and access to information is so important. It is why censorship is such a despicable thing. Anyone who censors, twists or lies the information they present, is your enemy  . . they are attacking your very ability to survive.

Construction Industry Expects Leaner Months Ahead

22 May 2023
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By Tu-Uyen Tran, Federal Reserve Bank of Minnesota

This year’s construction season is expected to be leaner for a significant number of construction firms in the Ninth District compared with last year’s, according to a recent Minneapolis Fed survey.

About half of homebuilders and a third of firms in other sectors of the industry said they think profits over the next six months will be lower than in the same period a year ago

“Interest rates have taken a large portion of our buyers out of the market,” said the owner of a Wisconsin home construction firm. “Only higher end cash buyers don’t seem to be fazed.”

Nearly half of construction firms reported fewer new projects out for bid—known in the industry as requests for proposals (RFPs)—in what is normally a very busy season for them. Some respondents said more projects were delayed or canceled than normal.

The CEO of a Twin Cities architecture firm that works primarily in the commercial sector estimated that a third of the firm’s projects have been paused “based on lack of financing and financial stress of owners and developers.” The number of paused projects is still growing, she said.

Despite the gloomy forecast, however, many said they are optimistic about the future as they adapt to new conditions and seek out new markets.

The survey, conducted throughout April, included 254 respondents.

The construction industry has struggled with customer demand in the past year. A growing number of respondents have reported lower gross revenue since April 2022. In November, more than half of respondents reported lower RFP activity from private-sector customers in recent months compared with the same time period in 2021.

The hardest hit sector then was residential construction.

Up to that point, the industry had coped for several years with a tight labor market and supply chain disruptions resulting in higher project costs. 2022 added a new challenge with a sharp increase in interest rates. Benchmark prime loan rates exceeded pre-pandemic levels about midyear and kept rising. That made it harder for customers to afford the higher costs, especially homebuyers.

2023 could be déjà vu all over again for the industry with nearly half of respondents reporting lower RFP activity from private-sector customers in April. Residential construction was again the hardest hit.

“We simply are not getting the same amount of work we did three years ago,” said a Wisconsin homebuilder. “We have to bid more for the same amount of work.”

Outside of the residential sector, would-be customers are also trying to make sense of a changing economy . . . developers are trying to figure out what the market needs…

There’s also uncertainty about the direction the economy is going with so much speculation about a possible downturn and its timing.

All of which seems to have resulted in more hesitation among developers.

“There are projects being bid but not a whole lot of movement on them,” said a respondent from a Greater Minnesota subcontractor in the commercial sector. “Owners seem to want to ‘wait the storm out’ on a lot of projects.”

Projects that do get the greenlight, the respondent said, are mostly from large corporations, such as fast-food chains and big-box retailers.

Respondents are reporting elevated levels of project cancellations and delays. Thirty-nine percent of respondents said they had seen more cancellations recently compared with three months ago; respondents in the industrial and residential sectors were more likely to report cancellations. More than half of respondents said they had seen more delays, again, with higher rates in the industrial and residential sectors. In the past, delays have often been associated with late delivery of construction materials. But responses in the April survey suggest that many customers are changing their minds.

While interest rates are a top concern for many firms, especially those in the residential sector, for the rest of the construction industry, this concern pales in comparison to labor availability and price increases for construction materials and other inputs. These emerged as the top two concerns for the industry as a whole outside of customer demand, according to respondents.

Even in the residential sector, interest rates were less commonly cited compared with input costs.

A Greater Minnesota architect in the residential sector said none of her clients understand how much higher prices are. “Disbelief causes numerous restarts on projects that come in significantly over budget [compared with] when preliminary cost-per-square-foot estimations come in from contractors. We advise but are not always believed.”

She said the average cost of a home has gone up from $350 per square foot to $500 or even $550. “It is shocking to all of us.”

About a third of respondents said they had experienced price increases of 5 percent or more just in the past three months, and another third said their prices increased between 1 and 5 percent.

These rapid price increases have led to changes in how builders do business.

The Greater Minnesota residential architect said she has to constantly request new bids from suppliers to find the best prices because those prices seem to change every week to two weeks. “This is exhausting.”

A Twin Cities subcontractor in the commercial sector said the firm focuses more on projects that can start immediately because material costs in the near future are easier to estimate. For projects that are further out, the subcontractor said, the firm errs on the side of caution and submits bids that assume high increases in material cost even if it means the bids aren’t competitive. “We’re unwilling to hold the bag on far out contracts that include materials. If we’re bidding work that’s out six months, we are severely marking up our bids to reflect past material uncertainties that cost us millions of dollars.”

Hiring remains a challenge for many firms. Of those that have hired or planned to hire, 57 percent described the labor market as very tight with most of the rest saying it was slightly or moderately tight. Only 3 percent said it wasn’t tight.

That’s put more pressure on wages. About a third of firms said they had increased wages by more than 5 percent in the past 12 months. About a fifth said they planned to increase wages by more than 5 percent in the next 12 months.

“It seems most employees are fishing for other jobs to get more money causing us to pay more to keep them,” said a respondent from a Twin Cities subcontractor involved in the residential and commercial sectors. “New applications are asking for $25 to $30 an hour with little experience.”

With higher costs and more competition for fewer projects, some respondents said they’ve had to absorb the higher costs themselves.

“We’ve had to reduce our profits and margins in order to secure jobs,” a Wisconsin homebuilder reported. “This is not a sustainable practice as the cost of doing business keeps increasing and our gross proceeds are decreasing.”

Despite the many challenges respondents reported, a majority of respondents reported a positive to neutral outlook with 48 percent saying they are optimistic about the next six months and 29 percent saying they are neutral.

Even in the residential sector, 41 percent are optimistic and 28 percent neutral.

One reason respondents are more positive than their financial situation might suggest is they’re looking for opportunities in different markets and are feeling good about their chances of success. The owner of a Twin Cities residential subcontracting firm, for example, said that as fewer people look to build new homes, he’s focusing more on remodeling projects, where he believes he’ll have a better chance of winning contracts.

Most firms, including this subcontractor, are still hiring. Nearly two-thirds of respondents said they had hired in the past three months, and three-quarters said they plan to hire in the next six months. Those figures are only slightly lower than a year ago but double what they were two years ago, when the industry was on the upswing and interest rates were much lower.

For some contractors, the challenges faced by the construction industry are the new norm they will learn to live with.