The value of construction projects in Springfield rose about $6.3 million last year, a sign the area’s economy is slowly improving.

The city issued 1,645 building, renovation and other permits last year for projects valued at about $29 million in total, according to public documents from the building regulations department.

In 2011, the city issued about 1,580 permits for projects valued at about $22.7 million in total.

That growth is a good sign, said Shannon Meadows, the city’s community development director.

“Regionally, we’re starting to see a bit of a recovery, seeing investment and reinvestment in commercial enhancement … 2012 showed some positive indicators and we look forward to carrying that into 2013,” she said.

Commercial construction accounted for the gains. The city saw about $26.2 million in commercial project values, up from $19.6 million in 2011. Residential development saw about $2.7 million of project values in 2012, a slight drop from the 2011 total of $3.1 million.

“We’re heading in the right direction,” said Kent Sherry, the executive director of the Building Industry Association of Clark County.

Sherry said he’s cautiously optimistic gains will be made in the construction industry this year.

“I don’t see tremendous gains,” Sherry said. “It will be pretty much in line with what we’re seeing across the country, which would be sort of a slow comeback. We are starting to see some new housing growth out there, but not speculation homes.”

One of the key factors in the increased project values was the Neighborhood Stabilization Program, Meadows said. The city has received $8.5 million since 2009 through two phases of the federal grant program, which was designed to aid communities rocked by waves of abandoned, foreclosed houses that can lead to lower property values and safety concerns for neighborhoods.

Some of those properties, like the Neighborhood Housing Partnership’s $1.8 million City View Apartments for seniors, are considered commercial because they have more than four units.

Other large investments came from the $10 million mental health hospital, the $7.9 million Rocking Horse Center expansion and the $5.5 million Ohio Valley Medical Center’s ortho-spine institute.

Two area McDonald’s locations also were remodeled, and a new Family Dollar opened on East Street. Downtown, the Turner Foundation has worked on a $100,000 renovation of the former Meeks building on Fountain Avenue that now houses Fair Trade Winds, Running with Scissors Creative Collective and Doug Frates Glass studio.

The Wright-Patt Credit Union also began construction last year of a new building on Bechtle Avenue because it needed to expand.

“It’s a good indicator of a community that’s headed in the right direction,” Meadows said.

The Rocking Horse Center also received grant money from the Health Resources and Services Administration, according to CEO Dana Engle.

“We needed to expand because there’s a lot of need in the community that we’re not able to meet with our existing facilities,” Engle said. “We were just strapped for space and we had the funding to move forward with it. Those two things really dictated it.”

The city hopes to issue the same number of permits and possibly more this year, Meadows said, but a lot of that depends on investors within the community. Two housing developments, including the $7.3 million Hayden House — a senior living development — and the $5.5 million Mulberry Terrace — an Interfaith Hospitality Network development designed to keep people and families out of homelessness — will begin construction this year.

Pete Noonan of Midland Properties, a local developer, said the commercial market improved in 2012.

“There’s no question the economy is strengthening with regards to real estate and commercial real estate,” Noonan said. “We’re certainly seeing improvement. There’s more activity, more business being done.”

But while interest rates are improving, Noonan said, banks remain careful about lending, especially commercial lending.

“They’re doing it, which is a good thing,” he said. “Interest rates are attractive if you’ve got a project that makes sense.”

Noonan hopes the market will continue to improve, but believes it will be a slow recovery, especially in an area like Springfield.

“We’re not growing, so demand is really for replacement, as much as anything, and not new construction,” Noonan said.

The city issued 73 combined commercial and residential demolition permits last year, compared to 99 in 2011.

Meadows said she expects the number of demolitions to increase this year with the infusion of nearly $943,000 awarded to the city and Clark County as part of the Moving Ohio Forward project.

The city expects to demolish about 125 blighted homes with those dollars this year, some of which were used to begin demolitions last year.

“We’ll be aggressive in getting demolitions that are ready to proceed accomplished,” Meadows said.