Another Cold Winter in the Northwest
by Nate Dorr - nate.dorr@state.mn.us
March 2009
Another Cold Winter in the Northwest
How do we know if we’ve hit bottom in this economy? As you may have heard, the National Bureau of Economic Research officially declared the country has been in a recession since December 2007. This declaration was made on December 1st, 2008, an entire year later.
Rural areas often lack the population to get detailed city or county-level estimates, frequently because of data suppression regulations. However, certain data are available to the public regardless of their geography.
Best Bets for “Recession Proof” Employment
The latest employment data allows us to compare the second quarter of 2008 to past trends. Looking at quarter-to-quarter employment change and comparing like quarters from previous years going back five years helps determine which industries in the Northwest might well survive this global crisis. Although nothing is safe from a major economic downturn, Table 1 shows a detailed listing of industries with near stable or significant growth.
Table 1
| Northwest Minnesota Industries Weathering the Slowdown |
| Industry |
Employment |
Percent of
Region
Employment |
Three Year
Employment
Change |
| Total of All Industries |
216,827 |
|
1% |
| Public Administration, All Levels |
14,486 |
7.0% |
6% |
| Educational Services |
22,474 |
10.4% |
-1% |
| Nursing and Residential Care Facilities |
11,964 |
5.5% |
-4% |
| Hospitals |
10,300 |
4.8% |
2% |
| Ambulatory Health Care Services ** |
7,665 |
3.5% |
13% |
| General Merchandise Stores |
6,423 |
3.0% |
14% |
| Social Assistance ** |
5,267 |
2.4% |
32% |
| Credit Intermediation and Related Activity* |
4,019 |
2.3% |
3% |
| Merchant Wholesalers, Nondurable Goods |
4,871 |
2.2% |
12% |
| Merchant Wholesalers, Durable Goods |
4,530 |
2.1% |
13% |
| Administrative and Support Services |
3,779 |
1.7% |
17% |
| Machinery Manufacturing |
3,063 |
1.4% |
18% |
| Animal Production |
1,449 |
0.7% |
24% |
| Utilities |
1,402 |
0.6% |
6% |
| Agriculture and Forestry Support Activity |
470 |
0.2% |
12% |
| Couriers and Messengers |
438 |
0.2% |
5% |
| Waste Management and Remediation Service |
436 |
0.2% |
20% |
| Support Activities for Transportation |
199 |
0.1% |
17% |
| Private Households |
124 |
0.1% |
53% |
| Source: MN DEED, Quarterly Census of Employment and Wages, 2Q 2008, Northwest Planning Area, All Ownerships |
| Note: Three year employment change is from 2Q 2005 to 2Q 2008, unless otherwise signified |
| * Private Ownership Data Used |
| ** Q1 2008 data used for employment, and Q1 2005 to Q1 2008 data used to calculate 3-year change; second quarter data not available |
In the Northwest Region several industries like education, healthcare, wholesalers, utilities, and waste management services tend to operate regardless of economic conditions. Growth in education is greatest among post-secondary education jobs and private schools, while K-12 jobs are either stable or slightly decreasing. Nursing and residential care facilities experienced a decline among community care for the elderly and nursing care facilities, while employment in residential mental health facilities and other residential care facilities (foster care, half way homes, and disabled group homes) was on the rise. Of course, with the aging population community care for the elderly is projected to grow by 78.2% from 2004 to 2014, followed by residential mental health facilities (54.2%), other residential care facilities (50.5%), and nursing care facilities (7.7%).
Looking for a Comeback
Many employment losses in the Northwest region of Minnesota have occurred in its most prized industries. Industries related to the slumping housing market like construction, furniture, wood product manufacturing, and real estate have all been negatively affected. Much of the growth in these industries was fueled by the construction of retiree and vacation homes in the lakes regions. The wood products industry has also suffered as timber shortages in the region have increased input costs.
As credit availability and consumer based spending slowed nationwide, so have motor vehicle and retail sales, transportation equipment manufacturing, and sporting goods and hobby store purchases in the region. Reduced sales of these “non-essential” items have forced many stores and shops to cut back on production and labor. The information in Table 2 shows which industries have lost employment and also the season we can start looking for them to add jobs.
Table 2
| Northwest Minnesota Industries Looking for Recovery |
| Industry |
Employment |
Percent of
Region
Employment |
Three Year
Employment
Change |
High
Employment
Season |
| Total of All Industries |
216,827 |
|
1% |
|
| Transportation Equipment Manufacturing |
5,211 |
2.4% |
-10% |
Summer/Fall |
| Specialty Trade Contractors |
5,088 |
2.3% |
-9% |
Summer/Fall |
| Wood Product Manufacturing |
4,344 |
2.0% |
-11% |
Summer/Fall |
| Motor Vehicle and Parts Dealers |
3,740 |
1.7% |
-10% |
Summer |
| Membership Organizations and Associations |
3,286 |
1.5% |
-10% |
Winter |
| Construction of Buildings |
2,583 |
1.2% |
-15% |
Summer/Fall |
| Miscellaneous Store Retailers |
1,379 |
0.6% |
-14% |
Summer |
| Real Estate |
1,292 |
0.6% |
-6% |
Summer |
| Plastics and Rubber Products Manufacturing |
864 |
0.4% |
-17% |
Varies |
| Nonmetallic Mineral Product Manufacturing |
852 |
0.4% |
-15% |
Summer |
| Sporting Goods/Hobby/Book/Music Stores |
809 |
0.4% |
-19% |
Summer/Fall |
| Furniture and Related Product Manufacturing |
585 |
0.3% |
-28% |
Summer |
| Furniture and Home Furnishings Stores |
556 |
0.3% |
-19% |
Summer/Fall |
| Broadcasting (except Internet) |
510 |
0.2% |
-6% |
Varies |
| Textile Product Mills |
455 |
0.2% |
-14% |
Varies |
| Source: MN DEED, Quarterly Census of Employment and Wages, 2Q 2008, Northwest Planning Area, All Ownerships |
Finally, to get a picture of where the most recent layoffs are, Table 3 shows initial Unemployment Insurance claims for the month of January by county. The data in the table reflects layoffs in the manufacturing, construction, accommodation, and retail sectors. Much of the construction and summer seasonal UI claims would have been captured during the months of November and December, although January is typically the month with the highest unemployment.
Table 3
Ten Counties with the Highest
Initial Unemployment Insurance Claims |
| County |
January 2009
Initial Claims |
2008 to 2009
Claim Change |
| Crow Wing |
495 |
23% |
| Otter Tail |
433 |
-3% |
| Morrison |
395 |
51% |
| Roseau |
266 |
-15% |
| Douglas |
251 |
36% |
| Beltrami |
250 |
-7% |
| Becker |
243 |
3% |
| Pennington |
236 |
-10% |
| Cass |
231 |
-5% |
| Todd |
224 |
35% |
| Source: MN DEED, Summary of Unemployment Insurance Statistics, January 2009 |
Job Seeker Tips
Much of the employment losses will turn around before too long. Job seekers should keep in mind that the chance of getting employed increases with the help of Minnesota’s workforce centers. Workshops on resume writing, interviewing, and the hidden job market will give them a leg up on the competition. Social networking, informational interviews, and volunteering are all part of the hidden job market strategy, which gives employers a chance to learn more about you and vice versa. Posting resumes on www.MinnesotaWorks.net along with basic job search techniques should also be standard in the job search tool box. Many small businesses, especially, are opting to review resumes on-line rather than posting vacancies and reviewing 100 or more applications.
Job seekers should also consider going back to the basics. The information in Figure 1 combines reasons for not securing employment from the job seeker perspective and the employer perspective. Applicants are generally lacking technical skills, soft skills, and basic skills. Job seekers on the other hand believe they remain unemployed for other reasons like related experience, age bias, or other social-demographic factors. Technical training can be obtained at local colleges and schools for a variety of occupations or through internships at local businesses. Soft skills like showing up for work on time, grooming, or ability to work with others or independently all must be addressed at the individual level. This also holds true for basic skills like reading, writing, math, and communication.
What’s Next?
It’s true that layoffs get much more press than several rounds of new hires. Keeping our ear to the ground, we should be listening for news of job postings in these industries as summer rolls around. If we go into the fall of 2009 without minor recoveries in our region, then workers and social service agencies might stock up for another long winter next year. Depending on how the Federal stimulus package shakes out, our region might be well positioned to implement infrastructure and construction projects. The large number of unemployed and skilled construction workers here would be a great fit. And with the growing interaction between local colleges, economic developers, private businesses, and government around green industry jobs, the Northwest Region has the potential to emerge as a leader in the renewable energy market.
For detailed information on the industries listed in this article, check out the U.S. Census Bureau’s link to industry categories and definitions as defined by the North American Industry Classification System at http://www.census.gov/epcd/naics02/naicod02.htm