Industrial Analysis

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

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

Overview

Following the large gain experienced in January, Minnesota’s employment fell by 3,400 jobs in February. Seven of 11 supersectors posted a decline for the month. Substantial losses ranging from 2,800 to 1,500 occurred in construction, leisure and hospitality,government, and financial activities. Large gains were posted in trade, transportation, and utilities, up 3,400, and in manufacturing, up 2,000 jobs. Despite the monthly decline, year-ago comparisons showed another improvement registering at -2.3 in February, an improvement over -2.8 in January. The large improvement reflects last February’s loss of 14,000 jobs on a seasonally adjusted basis. So a substantially weaker year-ago number to compare to made the improvement in over-the-year comparison possible despite a small current monthly loss. The educational and health services supersector was the only one to show annual growth.

Mining and Logging

Mining and logging experienced a loss of 100 jobs in February. Over the past year the supersector posted a loss of 1,400.

Construction

Construction employment fell 2,800 in February, erasing a gain of 2,200 posted last month (revised). Most of the loss was from specialty trade contractors where seasonal losses were substantially larger than usual. However, heavy and civil engineering also showed weak results for the month. The annual rate of loss measured 13.3 percent, a figure eclipsed only by the much smaller mining and logging supersector. While heavy and civil engineering showed a small gain, the other industry groupings continued to show large losses including 8,700 in specialty trade contractors and 2,300 in building construction. After showing gradual improvement in mid-2009, this trend has been interrupted with the February rate of annual change equal to the November 2009 rate.

Manufacturing

The manufacturing supersector posted an estimated job gain of 2,000 for the month of February. Durable-goods manufacturing accounted for 1,700 of these additions. Most of the estimated durable-goods manufacturing industries showed at least some measure of improved growth. Fabricated metal product, computer and electronic product, transportation equipment, and furniture and related product manufacturing were areas showing the strongest performance for the month. Nondurable-goods manufacturing added 300 jobs for the month with part of the gain coming from food manufacturing. The supersector still showed the largest numeric loss, down 21,900 over the past 12 months, 16,800 of which came in durable goods. Both fabricated metal product and computer and electronic product manufacturing showed losses in excess of 5,000. Nondurable-goods manufacturing was down nearly 5,100 jobs with the loss largely from printing and related support activities.

Trade. Transportation, and Utilities (TTU)

The largest monthly gain was the addition of 3,400 jobs in trade, transportation, and utilities. Nearly all of the monthly gain was in retail trade which added 2,900 jobs. The gain in the past two months in retail trade probably reflects a combination of some real improvement and also fewer seasonal layoffs than usual after the much reduced level of holiday hiring this winter. Retail trade employment is now about at its August level on a seasonally adjusted basis. On an annual basis the supersector showed a loss of 10,800 with transportation, warehousing, and utilities accounting for nearly 5,400 of the losses and retail trade down 5,100 jobs. Wholesale trade has improved a great deal the past five months and showed a loss of only 300 largely because of gains in nondurable-goods wholesaling.

Information

Employment in the information supersector increased in February by an estimated 400 jobs. This follows a similar increase in January. Telecommunications was the locus of part of the monthly increase, but publishing industries showed no positive movement. Over the past year the supersector showed a decline of 1,300, equal to -2.3 percent. The losses were essentially from declines in publishing industries which were down 1,400 jobs the past 12 months.

Financial Activities

Financial activities showed a third consecutive month of job loss, down 1,500 in February. Over the past three months the supersector has lost an estimated 2,500 jobs. Nearly all of the losses for February and for the three-month period were in finance and insurance. The monthly loss was spread fairly evenly among finance and insurance industries with somewhat greater concentration of losses in insurance carriers. Real estate and rental and leasing contributed a loss of only 100 for the month. The supersector posted an annual loss of 4,500 in February. This loss came almost entirely from finance and insurance which had a decline of 4,100. Securities, commodity contracts, and related was down 2,000 jobs, and credit intermediation overall was down 2,300 jobs. The rate of over-the-year loss has not shown any real improvement measuring -2.6 percent in February, essentially the same rate as experienced the second half of 2009.

Professional and Business Services (PBS)

The professional and business services supersector added 200 jobs in February. The gain comes entirely from administrative and support services, which added 1,000 jobs for the month. This increase was well distributed with employment services and services to buildings and dwellings both showing improvement for the month. This was the fifth consecutive month of growth for administrative and support services. Nearly erasing this increase was a loss of 800 in management of companies. Professional, scientific, and technical services showed no change in employment for the month. Compared to last year the supersector showed a loss of 900 jobs. The performance of industries within the supersector varied substantially. Professional, scientific, and technical services employment was down 3,300 jobs with losses in each estimated component industry. Management of companies showed a decline of 3,400. These sizeable losses were largely offset by a gain of 5,700 in administrative and support services which has shown strong results over the past five months.

Educational and Health Services

There was essentially no change in employment level in educational and health services as private education showed an estimated loss of 100. The supersector was the only area showing growth over the past 12 months with a gain of 3,500 posted in February. Private educational services showed a loss of 1,400, but this was outweighed by additions in health care and social assistance. Strong growth was still present in nursing and residential care facilities, up 3,700, and social assistance, up 2,800.

Leisure and Hospitality

Leisure and hospitality experienced a monthly decline estimated at 2,300 in February, erasing the gain posted in January. Arts, entertainment, and recreation fell by 1,300 as reductions were beyond the expected seasonal levels. There was a loss of 1,000 in accommodation and food services. Essentially all of this loss was in limited service eating places. Over the past year the supersector showed a loss of more than 7,000. Most of this loss was in arts, entertainment, and recreation with a loss of about 5,800. The remaining losses came from accommodation.

Other Services

There was a monthly loss of 700 in other services with most of the loss coming from religious, grantmaking, civic, professional, and similar organizations. Over the past year other services lost 4,100 jobs with substantial losses in each of its three component industries.

Government

Government posted a loss of 1,900 jobs with nearly all of the losses coming from local government. Federal government showed a small loss and state government a small gain. Compared to February 2009 the supersector lost 1,500 jobs. U.S. post offices saw a decline of more than 1,100, state government education was down nearly 1,000, and local government fell by 700.

*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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