Construction, jobs booming in Edwardsville, according to economic experts

Despite lackluster economic growth in Illinois, construction in Edwardsville has nearly tripled in the last two years, rebounding enormously from the depths of the recession.

According to figures presented at the annual economic forecast breakfast hosted by the city Tuesday, Edwardsville saw $153 million worth of new construction in 2016. That’s a big step up from $93 million in 2015 and $68 million in 2014.

“We’re really excited about that, and the rise of new jobs,” said Walter Williams, economic developer for the city of Edwardsville.

At least some of it is due to the city’s own projects: the new $13 million police and fire station currently under construction, a $3.5 million fire station on the Southern Illinois University Edwardsville campus, and the new splash pad park adjacent to the new police station — which Mayor Hal Patton said opened to an average 500 visitors per day last summer.

But it’s still a big rebound from the recession, which brought construction to its lowest point in 17 years with only $22 million in construction.

Contrast that to this year, when two companies moved their corporate headquarters to Edwardsville: dairy company Prairie Farms and sports outfitter First to the Finish, both constructing new buildings. Amazon moved into a 770,000-square-foot warehouse distribution center recently constructed, and Madison Mutual is moving its headquarters to the new three-floor office building downtown adjacent to the Edwardsville Public Library.

At least $4 million of that new investment is in Edwardsville’s downtown, Williams said. “Downtown is our front door,” he said.

A breakdown between residential and commercial construction was not immediately available.

Jobs come to town

The growth of the distribution centers out by the interstates on the edge of town has brought in thousands of new jobs, both for construction and for permanent positions, Patton said, and 30 percent of existing businesses hired new employees last year. “These numbers prove that Edwardsville is open for business,” he said.

In fact, Williams said the toughest part is getting enough workers to fill the jobs and letting developers know that there are workers for those jobs when they choose to locate here. During the peak holiday season, Target’s center needed 1,400 employees and had to use five different employment agencies to fill the jobs, Williams said.

“(Companies) have to be creative, and your approach has to be different,” he said. The days of putting out a help-wanted ad are going away, replaced with major temp agencies bringing on “perma-temps” or temp-to-permanent hires in large numbers.

Meanwhile, there are the “missing” workers. Tim Sullivan, an economist with RSN Economic Group and a professor at SIUE, said the percentage of U.S. residents ages 25 to 54 with jobs or actively looking for jobs has fallen 3 percent since 2000 — and in Madison County, it’s about 3.5 percent. These “missing” workers comprise about 4 million people nationally.

Often these people are “underemployed,” people who can’t take on more jobs but can’t get by on the work they have, or who were laid off from good-paying jobs and can’t commit to longer-term work because they are waiting to see if their old job returns. “We have to find ways to get these folks back into the labor force,” he said.

For example, Williams said the city is working closely with Madison County Transit to find ways to provide transportation to the employment hubs of the area, including Gateway Commerce Center or Lakeview Commerce Center where the warehouses and logistics systems operate.

“We understand the issues of getting out to Gateway or Lakeview,” Williams said. “Madison County Transit is going to extraordinary lengths to connect employee with employer.”

Now the city has to get the word out about those jobs and transportation systems, so they realize the opportunities they have here, Williams said.

Will the growth continue?

For all of this growth, the traditional markers of economic growth are not as encouraging. Sullivan said that traditional wisdom since World War II has been that healthy economic growth is about 3.5 percent increase in the gross domestic product.

“That won’t get you on Mount Rushmore, but it’s considered normal economic growth,” he said.

However, the average GDP growth nationally has hovered at about 1.8 percent since 2000 — and it’s not just the Great Recession, he said.

Illinois has fared slightly worse than the rest of the country, Sullivan said: while the national growth rate was 1.8 percent, Illinois is about 0.8 percent and the St. Louis metropolitan area is 0.7 percent. While the government doesn’t track numbers by county, Madison County is faring slightly better than the city as a whole at 0.8 percent, based on reported income levels, he said.

By comparison, then, Sullivan said he forecasts more growth: 1.5 percent for Madison County, 1 percent for the St. Louis region and 1.3 percent for Illinois, which are still behind his predicted national forecast of 2.3 percent.

“(The numbers) are pessimistic by post-World War II standards, but optimistic by 2000-and-beyond standards,” Sullivan said. “We haven’t had those growth rates for the last 15 years.”

Sullivan said that his projections are based solely on numbers, not speculation about political leaders or pending bills. “There’s a lot of uncertainty right now,” he said, not only at the federal level with financial regulations, energy policy and international trade, but at the state and local level, centered on the budget stalemate in Springfield.

Williams said that Sullivan’s predictions are in line with what he’s heard from the Federal Reserve Bank of St. Louis. “They approach their numbers differently, but they came to the same conclusion,” he said.

Williams said his takeaway from the economic forecast breakfast was that Edwardsville is definitely a buyer’s market, and business leaders should realize that growth means they can’t afford to wait on their projects.

“We have a lot of people sitting on the side,” he said. “Developers are out there, they want to move, they’ve acquired the land … they need the clients.”

This story was originally published February 7, 2017 at 3:41 PM with the headline "Construction, jobs booming in Edwardsville, according to economic experts."