Industrial Analysis

By Jerry Brown - jerry.brown@state.mn.us
April 2010

Monthly analysis is based on seasonally adjusted employment data. Yearly analysis is based on unadjusted employment data.*

Overview

Unlike the U.S. as a whole, Minnesota failed to show an employment increase in March. Seasonally adjusted estimates showed a loss of 1,800 jobs in March. February employment was revised upward but still showed a loss of 1,600. Five supersectors decreased and five increased in March. The largest decline was a loss of 3,000 in trade, transportation, and utilities. Large losses were also estimated in professional and business services and in educational and health services. Manufacturing added 1,500 jobs, marking a third consecutive increase for the supersector. Leisure and hospitality was up 1,500, and government added 1,200. Over the past year the state showed a decline of 1.6 percent, equal to 42,500 jobs. There were two supersectors with over-the-year job growth. Educational and health services showed a gain of 0.7 percent, and professional and business services was up 0.3 percent. Manufacturing still showed the largest numeric loss, down 14,000 jobs over 12 months. Losses in excess of 9,000 occurred in construction and in trade, transportation, and utilities. Other major declines occurred in leisure and hospitality, other services, and financial activities.

Mining and Logging

There was no change in employment in mining and logging in March. Compared to the previous year there was a decline of 1,000 jobs, mostly caused by reductions in iron ore mining.

Construction

Construction employment grew by 300 in March on a seasonally adjusted basis. Since last August the supersector has alternated between months with losses and months with gains yielding a net loss of 3,500 during this time. Over the past year the supersector showed a decline of 9,800, equal to 12.3 percent. Although large, this decline is an improvement compared to 2009 when the annual loss averaged 16 percent. Construction of buildings and specialty trade contractors continued to show the large declines that have been occurring for more than three years. Heavy and civil engineering construction showed a small gain over the past 12 months.

Manufacturing

For a third consecutive month manufacturing saw an increase in employment. The March gain totaled 1,500. During the past three months, 6,100 jobs have been added. Nearly all of March’s increase came in durable-goods manufacturing, which is also the case for the growth during the past three months. A number of durable-goods industries showed improved monthly results including fabricated metal product; machinery, computer and electronic product; wood product; and transportation equipment manufacturing. These recent developments have significantly improved comparisons to last year as the annual rate of job loss dropped to -4.6 percent, a major improvement from the -13 percent annual change posted last November. Over-the-year comparisons have improved for both durable- and nondurable-goods manufacturing in recent months but much more dramatically for durable goods. Losses in nondurable goods were principally in paper manufacturing and in printing and related support activities. An improvement in manufacturing has been indicated for some time by the Institute for Supply Management’s manufacturing index, which began showing conditions for growth eight months ago. The index registered 59.6 in March.

Trade, Transportation, and Utilities (TTU)

Following two sizeable gains in January and February, employment in trade, transportation, and utilities experienced a loss of 3,000 for March. There were declines in each of the three major components. Wholesale trade was down 1,500, the majority of this decline coming in durable-goods wholesaling. Another 1,000 jobs were lost in transportation, warehousing, and utilities with none of the component industries showing any positive signs during the month. Retail was off by 500 jobs. Over the past 12 months, employment fell by 9,100 jobs. Most of the loss came in transportation and warehousing, down 5,700 since last March. Retail trade also showed a large decline, down by more than 3,000 jobs. While still posting a substantial annual loss, retail trade showed another month of improvement as the percent annual loss dropped to -1.1 percent compared to -5 percent in December 2009. Retail trade should reach its employment trough in the next few months barring some additional calamity in the economy. Retail sales have shown monthly increases in recent months, and March Census advance retail estimates showed sales up 7.6 percent from March 2009. Transportation, warehousing, and utilities is hovering near what appears to be its employment trough.

Information

Information employment posted a loss of 600 for the month of March. This was the first loss since last November. Some of this loss came in publishing industries, but the majority was in industries outside traditional publishing and telecommunications. Over the past year information employment was down 1,800. Nearly 1,500 of this loss was in publishing industries.

Financial Activities

There was little change in employment in financial activities with seasonally adjusted data indicating a gain of 300 for the month of March. All of the increase came in finance and insurance, which posted the first monthly increase since November, up 800 for the month. This was largely offset by losses in real estate employment. On an annual basis, financial activities showed a loss of 3,100 jobs. About 2,500 of these jobs were lost in finance and insurance, particularly in depository credit intermediation and in securities, commodity contracts, and other related activities. The only yearly growth in the estimated industries was a small gain in insurance related industries.

Professional and Business Services (PBS)

A loss of 1,200 jobs in March in professional and business services was the first decline for the supersector since November 2009. Administrative and support services added 300 jobs continuing a six-month trend of slight job gains. There were 200 additional jobs in management of companies. Professional and technical services was the locus of all the monthly job losses, down 1,700. All of its component industries were weaker for the month, but computer systems design and related and legal services showed the worst results. The growth in administrative and support services in recent months has propelled the industry group to a gain of 7,800 over the past year, largely in employment services. These gains were large enough to counter losses in other industries and produce an annual gain of 1,000 for the supersector as a whole.

Educational and Health Services

A loss of 1,900 in health care and social assistance offset a gain of 900 in private educational services to produce a net loss of 1,000 jobs in educational and health services. This is the second consecutive month with a loss of more than 1,000 in health care and social assistance and the seventh loss experienced in the past 10 months. Social assistance was easily the weakest component in the March estimates. Compared to a year ago, the supersector showed a gain of 3,200 or 0.7 percent, continuing the steady decline since posting 3.5 percent growth in May 2009. More than 70 percent of the annual gain came from health care and social assistance.

Other Services

Other services employment fell by 800 jobs, the fifth decline in the last six months. Over the past year the supersector lost 3,700 jobs with substantial losses present in each component industry.

Government

Government employment saw an increase of 1,200 jobs in March. This gain was essentially a result of the hiring of temporary Census Bureau workers for the ongoing decennial census. There was little change in state or local government employment. Over the past year the supersector showed a loss of 500 jobs. This loss came despite the addition of 1,400 jobs in federal government. State and local government lost 500 and 1,400 jobs respectively.

*Over-the-year data are not seasonally adjusted because of small changes in seasonal adjustment factors from year to year. Also, there is no seasonality in over-the-year changes.

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