Industrial Analysis

by Jerry Brown
June 2011

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

Overview

Minnesota employment saw an increase of 1,200 over the past month.  All of this growth came from private employers which grew by 5,400, but much of this gain was erased by a loss of 4,200 jobs in government. Outside of government, the only supersector showing a loss was manufacturing with a decline of 100. Construction and professional and business services were the areas showing the largest monthly gains, up 2,200 and 1,900 respectively. Financial activities and trade, transportation, and utilities both posted gains of 500 for the month. After slipping backward in April, the rate of annual change improved to 0.6 percent, very close to the 0.7 percent increase posted for the U.S. as a whole. Eight of 11 supersectors posted annual employment growth with professional and business services continuing to show both the largest numerical gain at 11,400 as well as the fastest rate of growth at 3.7 percent. Large gains were also present in educational and health services, manufacturing, and leisure and hospitality.

Mining and Logging

There was no monthly change reflected in the seasonally adjusted estimates for mining and logging. Over the past year the supersector showed an estimated gain of 400 jobs.

Construction

Construction employment showed a monthly gain of 2,200 in May. After posting a large monthly decline in April, at least a partial bounce back was expected. This is particularly true as weather is likely to have played a role in the soft April results. Still the May gain did not completely offset the loss in the previous month. All three of the major components contributed substantially to the monthly gain. Compared to a year ago, construction employment again posted the largest decline, down 6,700, equal to -7.5 percent. Losses have grown larger after falling to a post-recession low of -3.6 percent in March. A couple of items contributing to the annual loss were the end of a major pipeline project and the end of stimulative tax breaks for installing energy efficient windows, doors, climate control systems, and insulation. Census estimates for housing permits in Minnesota are off substantially so far this year, down 31.7 percent January through April compared to last year.

Manufacturing

A small loss of 100 jobs was estimated for manufacturing in May. While nondurable goods manufacturing added 600 jobs, this was erased by a decline of 700 in durable goods manufacturing. In durable goods there was substantial weakness in wood product, fabricated metal, and computer and electronic product manufacturing. The gain in nondurable manufacturing was the third in the past four months and represents the strongest four-month period since prior to the recession. On an annual basis the supersector showed a gain of 4,500 or 1.6 percent. The annual growth was split with 2,800 in durable goods manufacturing and 1,700 in nondurable goods manufacturing. In durable goods the largest gain was in fabricated metal products which increased 1,300 although outside a loss in furniture and related product manufacturing, other durable goods manufacturing industries showed small gains. The leading indices measuring manufacturing health remain above growth neutral. The Institute for Supply Management’s purchasing manager index fell 6.9 points to 53.5. The Minnesota-specific business conditions index produced at Creighton University was still a relatively robust 63.2.

Trade, Transportation, and Utilities

A monthly gain of 500 jobs was estimated for the trade, transportation, and utilities supersector.  Wholesale trade posted its first monthly increase in 2011, adding 1,700 jobs with essentially all of this growth in nondurable goods wholesaling. There was also an increase of 400 in transportation, warehousing, and utilities. This growth was largely erased by a decline of 1,600 in retail trade where most of the detailed industries were weaker for the month, particularly food and beverage stores. Over the year the supersector was up only 500 but was back in positive territory after falling to -0.1 percent in April. Like the monthly results the growth came in wholesale trade, up 1,800, and in transportation, warehousing, and utilities, up 1,700 for the year.  It is notable that the gain in transportation, warehousing, and utilities did not occur in truck transportation. These gains were nearly offset by a loss of 3,000 in retail trade which, after briefly posting positive annual growth in January, has since gradually weakened in year-ago comparisons. Retail losses came mainly in building materials and garden equipment supplies, down 2,000, motor vehicle and parts dealers, down 1,300, and food and beverage stores, down 600 for the year.

Information

There was little monthly change in employment in information with an increase of 100 estimated. What small improvement there was appears to be in non-estimated industry areas.  Over the past year the supersector showed the addition of 600 jobs, up 1.1 percent. These gains were in non-published industries as non-internet publishing industries showed a loss of 600, and telecommunications was down 100.

Financial Activities

Real estate and rental and leasing posted its second month of growth for the year adding 600 jobs for the month. This outweighed a slight loss in finance and insurance to yield a gain of 500 for the supersector. Employment growth has not shown a consistent trend, positive or negative, in recent months for either finance and insurance or real estate and rental. Over the past 12 months the supersector showed a loss of 600, much of which was centered in real estate and rental and leasing which was down 1,500. Strong growth in insurance carriers erased a large portion of the losses experienced in the supersector.

Professional and Business Services 

Employment in professional and business services grew for the fourth time in 2011 adding 1,900 over the past month. All of the increase came in administrative and support services where an estimated 2,400 jobs were added. The strong gain in administrative and support came following a net loss of 600 for the previous two months. Professional, scientific, and technical services and management of companies both posted small losses. Over the past year supersector employment was up 11,400, equal to 3.7 percent. This rate of growth represents the best annual rate of growth since May 2008. Employment services, long the main engine of supersector growth, showed an increase of 8,000. Professional, scientific, and technical services and management of companies showed smaller increases, up 1,700 and 1,000 respectively.

Educational and Health Services

There was little change in educational and health services employment with a gain of 100 posted for the month. This masked obverse results in the two major components. Private education fell by 2,000 for the month as seasonal layoffs were greater than usual for May at schools. Health care and social assistance added 2,100 jobs with most of the gains coming in ambulatory health care, especially offices of physicians. Over the past year the supersector added 7,400 jobs with 5,400 coming from health care and social assistance. Large gains were present in ambulatory health care and in nursing and residential care facilities.

Leisure and Hospitality

Seasonally adjusted estimates showed no change in leisure and hospitality employment over the past month. Arts, entertainment, and recreation posted an increase of 2,300 for the month as summer hiring was higher than expected. This was directly offset by a loss in accommodation and food services where food services and drinking places showed somewhat weaker growth, particularly full-service restaurants. Annual growth equaled 3,500 with all of the supersector gain coming from accommodation and food services where 6,100 jobs were added. The strongest growth was in accommodation with a gain of 4,900 spurred by improved occupancy rates.

Other Services

Other services saw a small increase of 200 over the past month. Over-the-year comparisons showed a miniscule increase of 200, from an increase of nearly 300 in personal and laundry services.

Government

Government shed 4,200 jobs in May. There were losses in each major component but the largest decline was in local government, down 2,900 from weakness in local government education. Over the past year government showed a loss of 6,000 with the entire decline coming in federal government where there were 8,400 fewer jobs. This large loss was mainly from the inclusion of 8,200 temporary Census workers in the May 2010 count.   

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