Industrial Analysis

by Jerry Brown
July 2011

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

Overview

Minnesota experienced very robust job growth in June, adding 13,200 jobs over the past month.  While six of 11 supersectors added jobs, the monthly gain was largely centered in leisure and hospitality, where 8,000 jobs were added, and trade, transportation, and utilities, up 5,000. On the negative side construction lost 2,200 jobs, and professional and business services employment was down 1,200. Strong monthly employment gains contributed to a sharp increase in the rate of over-the-year growth, which increased from 0.5 percent in May to 1.2 percent in June. This was especially true in leisure and hospitality which showed an increase of 15,700 the past 12 months. Large gains were also present in professional and business services and in educational and health services.

Construction

Over the past month construction employment fell by 2,200. This decline was spread throughout the three major component industries with the largest losses coming in specialty trade contractors.  The loss erased a similar-sized gain in May. Over the past 12 months the supersector showed a decline of 8,200, equal to -8.6 percent. There were no bright spots as all three major component industries showed substantial losses. Construction of buildings was down 3.4 percent with all of these losses in residential construction as the commercial real estate market has shown improvement in recent months. Permits for new housing continued to fall with the number of units authorized down about 26 percent for the first half of 2011, according to Census Bureau estimates. Heavy and civil engineering construction was down 2,300, and specialty trade contractor employment fell 5,200.

Manufacturing

A monthly increase of 800 was estimated in manufacturing with 700 of the increase coming in durable goods manufacturing. The best growth came in machinery and fabricated metal manufacturing. Wood product manufacturing was off slightly. The slight gain in nondurable manufacturing reflected a mixed bag as losses in food manufacturing were offset by gains in paper manufacturing and in printing and related support activities. Growth over the last year measured 1.3 percent, equal to 4,000 jobs. Durable goods manufacturing added 2,100 with about 1,300 added in fabricated metal product manufacturing.

Trade, Transportation, and Utilities

One of the larger monthly increases came in trade, transportation, and utilities where 5,000 jobs were added. Most of the gain came in retail trade with a gain of 2,600. Food and beverage stores had a particularly strong month. Transportation, warehousing, and utilities added jobs for the fourth consecutive month, up 1,600. Wholesale trade increased 800 as nondurable goods wholesaling surged. On an annual basis growth improved substantially to 0.7 percent. Most of the growth was in transportation, warehousing, and utilities with a gain of 2,500. Wholesale trade added 1,700 for the year as gains in durable and nondurable wholesaling erased a loss of 1,500 in wholesale electronic markets and agents. Retail trade was much improved but still remained down 0.3 percent over the year.

Information

Employment in information industries fell 300 in June, continuing a pattern of alternating small losses and gains in 2011. Publishing industries estimates were somewhat weaker for the month.  Over the past year the information supersector was up 400 despite losses in both publishing industries and telecommunications.

Financial Activities

The financial activities supersector added 300 jobs in June as a gain of 900 among finance and insurance companies erased losses in real estate and rental and leasing. The supersector showed a loss of 400 over the past year. The loss came from a decline of 1,900 in real estate and rental and leasing. Growth in finance and insurance was driven by gains in insurance carriers which continued a record of strong gains, adding 2,300 jobs the past 12 months.

Professional and Business Services 

Employment in professional and business services was off 1,200 in June as all three major components showed monthly losses on a seasonally adjusted basis. This was the second loss in the past six months. Most of the decline came in administrative and support services which was down 900 jobs. Compared to last June, the supersector showed a job increase of 10,500, equal to 3.3 percent. All three major components added jobs in the last year but the majority of the gains came in administrative and support with a gain of 7,600. Employment services accounted for most of this gain, adding about 7,000 for the year. Strong growth was also present in computer systems design and related services which increased 1,500. Management of companies added 900 jobs.

Educational and Health Services

A monthly gain of 2,400 in educational and health services resulted almost exclusively from gains in private educational services which accounted for 2,200 of the increase. Most of the increase came from private colleges where seasonal declines have thus far been smaller than expected during the summer. Over the last year the supersector added 9,900. Educational services added 3,700 on strong growth in private colleges. In health care and social assistance most of the annual increase of 6,200 came in nursing and residential care facilities, up 3,300, and in ambulatory health care, up 3,000.

Leisure and Hospitality

The largest monthly gain came in leisure and hospitality with a gain of 8,000 jobs. Nearly all of this increase was in accommodation and food services which increased 7,400. There was substantial growth in each of the components of accommodation and food services but limited services eating places showed somewhat more robust growth. Over the past year the supersector showed a gain of 15,700, equal to 6.3 percent. The strong monthly gain was key to a substantial improvement in over-the-year comparisons in June. Accommodation has seen extremely strong growth, posting a gain of 6,600 for the year. Arts, entertainment, and recreation employment growth posted an annual gain for the first time in over a year, up 1,300 in June.

Government

An increase of 1,700 for the month in state government was the locus of the increase for government employment overall. Over the past year government employment was down 2,300 from a loss of 5,300 in federal government. State government saw little change, adding 200 jobs.  Local government showed a gain of about 2,700 jobs to erase a sizeable part of the federal government losses. 

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