Industrial Analysis

by Jerry Brown - jerry.brown@state.mn.us 
February  2011

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

Overview

The release of January 2011 data coincides with the release of the annual benchmark data. For all areas 2009 and 2010 unadjusted data has been changed, and most seasonally adjusted data has been replaced for the period 1990 forward. St. Cloud data were also impacted by noneconomic industry code changes that required reconstruction of some industries going back to 1990. Benchmarking resulted in a downward adjustment of five-tenths of a percent to the December 2010 total employment estimate.

For January, employment improved after two consecutive months of decline, adding 2,000 jobs. The modest increase belies a fairly positive month as nine of 11 supersectors showed measurable job growth. Unfortunately, very weak results in trade, transportation, and utilities, down 6,700 for the month, erased much of the growth in other industries. The largest increases were in educational and health services, up 4,200, and in leisure and hospitality, up 1,800. Compared to January 2010, employment was up 16,500 or 0.6 percent. Six of 11 supersectors showed gains over the past year with the largest increase in educational and health services, which added 10,200 for the period. Other large increases came in professional and business services, up 7,000, manufacturing, up 4,900, and trade, transportation, and utilities, up 2,300.

Mining and Logging

Employment in mining and logging was up 500 in January. On an annual basis the supersector added about 800 jobs over the past 12 months.

Construction

Construction firms added 200 jobs in January following a loss of 2,500 during the previous two months. The increase comes from improvement in specialty trade contractors where seasonal losses were below average, which erases slight weakness in construction of buildings and in heavy construction. The supersector continues to show substantial loss over the past 12 months with a loss of 4,300 posted in January. This is by far the largest annual loss among the supersectors. The largest portion of the decline came in heavy and civil engineering construction, which was down 2,800 as pipeline projects ended, making for unfavorable annual comparisons. Construction of buildings was down 1,100, and specialty trade construction was down 400. The January level of employment is the lowest January level since 1995.

Manufacturing

There was little change to manufacturing employment in January with a gain of 200 posted. Durable-goods manufacturing was up by 700 for the month, but this gain was largely offset by losses of 500 in nondurable-goods manufacturing. The gains in durable-goods manufacturing resulted from small improvements in several areas including wood product, fabricated metal, machinery, and miscellaneous manufacturing industries. Weakness in paper manufacturing and in printing and related was a main factor in the loss posted in nondurable-goods manufacturing. Since January last year manufacturing added 4,900 jobs with 4,600 of the gain in durable-goods manufacturing. By far the largest increase came in fabricated metal product manufacturing, although nearly all estimated durable-goods industries showed increase for the year.

Trade, Transportation, and Utilities

The estimated monthly loss of 6,700 in trade, transportation, and utilities was caused by declines in all three major component industries. Retail employment was down 3,400, transportation, warehousing, and utilities was off 2,200, and wholesale trade was down 1,100. A sharp drop in couriers and messengers was the main reason for the drop in transportation, warehousing, and utilities. On an annual basis the supersector showed a small gain of 2,300 that came from growth of 1,900 in transportation, warehousing, and utilities and 1,800 in wholesale trade. Retail trade offset these gains with a loss of nearly 1,500. Food and beverage stores, building material and garden equipment and supplies stores, and motor vehicle parts and dealers all showed substantial losses over the year. General merchandise stores and miscellaneous store retailers showed fairly strong gains compared to last year.

Information

Information employment changed little for the month, up 100 since December on a seasonally adjusted basis. Compared to last January the estimates showed a small loss, down 400 over the period. Annual losses were posted in publishing and telecommunications but were largely erased by gains in other industries of the supersector.

Financial Activities

Employment in financial activities increased 700 in January. All of this gain came from finance and insurance, which was up 700 mainly from increases in insurance carriers. There was no change in real estate and rental and leasing over the month. During the past 12 months the supersector posted a loss of 1,300. While insurance carriers showed a gain of 1,200 over the year, losses in other industries including real estate and rental and leasing, credit intermediation, and securities, commodity contracts, and other related industries outweighed the insurance gain.

Professional and Business Services 

The gain of 400 in professional and business services in January reflected widely varying results in component industries. Management of companies posted a strong result adding 1,600 jobs on a seasonally adjusted basis, and professional and technical services employment was up by 200. These gains were in large part offset by a loss of 1,400 in administrative and support services. Administrative and support job losses were centered in employment services, which saw larger-than-usual seasonal layoffs for the month. Over the past year professional and business services posted the second largest numerical gain, up 7,000 or 2.3 percent. Nearly 85 percent of the annual gain came in administrative and support services with these gains coming from employment services. Management of companies added 1,200 jobs for the year, and professional and technical services showed a loss of 100.

Educational and Health Services

A monthly gain of 4,200 was estimated in educational and health services with 3,400 of the increase from private educational services. A substantial gain in private colleges was the leading component of the educational gain largely because post holiday hiring occurred earlier at some institutions. Improved results in ambulatory health care and social assistance led to a gain of 800 in health and social assistance. The supersector was the largest source of new jobs over the past year adding 10,200 jobs. Most of the gain came in educational services which was up 7,100 for the year. Health care and social assistance added 3,100, with nursing and residential care facilities adding 2,900 jobs.

Leisure and Hospitality

A monthly gain of 1,800 in leisure and hospitality was estimated for January. This increase came almost entirely from additions in accommodation and food services where most components showed modest improvement for the month. Over the past year supersector employment was down 1,700. The loss was entirely in arts, entertainment, and recreation where a loss of 6,000 was present. Gains of 3,100 and 1,200 in accommodation and in food services and drinking places, respectively, were not robust enough to offset the employment decline in arts, entertainment, and recreation.

Other Services

A monthly gain of 900 in January erased a loss of the same magnitude in December. Most of the improvement was in personal and laundry services and religious, grantmaking, civic, professional, and similar services. Over the past year the supersector added about 700 jobs with most of the increase in personal and laundry services.

Government

Government employment showed a seasonally adjusted change of -300 over the month of January. Federal government showed a small gain that was outweighed by a loss of 700 in state government. Compared to January 2010 the supersector was down 1,700 with all three major components showing losses. The largest area of loss came in local government educational services.

* 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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