Industrial Analysis

by Jerry Brown
March 2011

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

Overview

February estimates showed an increase of 1,300 jobs for the month. Six of 11 supersectors showed gains for the month. The largest gains were in manufacturing, which added 2,400, professional and business services, with a gain of 1,200, and construction, up 1,000. There was only one large loss, a decline of 2,900 in educational and health services. Compared to last year, employment was up 19,600, a gain equal to 0.8 percent. All of the gain came in private industries, which were up 20,200. The largest annual gains were in professional and business services and in manufacturing with increases of 10,100 and 7,900 respectively. There were substantial losses in construction, down 3,500, and leisure and hospitality, down 3,100. Overall six of 11 supersectors showed annual growth.

Mining and Logging

There was little change over the month in mining and logging employment with a gain of 100 indicated. Compared to February 2010 employment was up 700.

Construction

Construction posted one of the larger monthly increases with a gain of 1,000 for the month on a seasonally adjusted basis. The monthly increase came essentially from specialty trade contractors. Over the past year the supersector posted the largest employment loss, down 3,500 during the period. The largest part of the decline came in heavy and civil engineering construction, which was down 1,900 in large part because 2010 data was inflated by pipeline construction. Construction of buildings was down 1,200, and specialty trade contractors declined 400. New housing construction seems to have bottomed out as permits for new housing units for the state were up 4.3 percent in 2010 compared to the previous year. Still, the rate of home construction is at very low levels, and the state continues to work through very large numbers of foreclosures.

Manufacturing

The strongest monthly growth came in manufacturing with a gain of 2,400 in February. The majority of the gains came in durable-goods manufacturing with a gain of 1,700 after increasing by 700 in January. These increases reversed several weak months in late 2010. Nearly every durable-goods industry for which estimates are prepared showed positive results for the month. Nondurable goods showed a gain of 700 for the month. Over the past 12 months manufacturing employment grew 7,900 with 87 percent of the growth coming from durable-goods manufacturing. Nearly all of the detailed durable-goods manufacturing industries showed substantial gains for the year led by an increase of 2,000 in fabricated metal product manufacturing. Nondurable goods was up about 1,000. The Minnesota economic conditions index was above growth neutral in February for the 19th straight month. The level was 59.8 in February, up from 55.2 in January, and indicates conditions for growth are present for coming months.

Trade, Transportation, and Utilities

There was a slight employment loss in trade, transportation, and utilities for February. None of the three main component sectors showed much change. Job losses of 400 in wholesale trade and 200 in retail trade slightly outweighed an increase of 400 in transportation, warehousing, and utilities. Most of the loss in wholesale trade came in durable-goods wholesaling. The increase in transportation, warehousing, and utilities came from truck transportation. On an annual basis the supersector showed a gain of 3,400. All of this growth came in wholesale trade and in transportation and warehousing, which added 1,700 and 2,300 respectively. There was a loss of about 500 in retail trade that offset part of these increases. The loss in retail comes despite a substantial improvement in retail sales for the U.S. over the past 12 months. Thus far this has not created consistent employment growth for state retail industries with most of the detailed retail industries down compared to a year ago.

Information

Information showed a monthly loss of 200 in February. Compared to last year the supersector showed a decline of 300 with declines in both publishing and telecommunications industries.

Financial Activities

Financial activities showed a loss of 600 for the month of February. All of the loss came from finance and insurance, especially in credit intermediation and securities, commodities contracts, and other related industries. The gain of 300 in real estate and rental and leasing came entirely from real estate. Compared to last February, the supersector showed a loss of 1,100. The only strong gain came in insurance carriers. Real estate and rental and leasing; securities, commodity contracts, and other related, agencies; brokerages and other insurance; and credit intermediation all showed annual job loss.

Professional and Business Services 

There was a monthly gain of 1,200 in professional and business services, following a gain of 1,500 in January. Most supersector gains came from administrative and support services with an increase of 1,400. Professional and technical services was down 400 for the month. Year-over-year the supersector showed an increase of 10,100. Most of the gain was in administrative and support services, which added 7,000 jobs from an increase of 8,000 in employment services. Smaller gains came in management of companies, up 1,400, and in professional, scientific, and technical services with a gain of 1,700. Computer systems design and related services added 1,300 jobs accounting for the bulk of gains in professional, scientific, and technical services.

Educational and Health Services

Employment in educational and health services fell 2,900 over the month. All of the losses came in private education where a loss of 3,800 occurred. The main reason for this loss was an altered seasonal pattern in private colleges and universities for the current year. Seasonal hiring associated with the start of the spring semester came somewhat earlier in 2011 meaning that employment was greater than expected in January and below expectations in February. Health care and social assistance employment increased 900 for the month partly offsetting the losses in private educational services with most of the increase in ambulatory health care services. Year-ago comparisons showed a gain of 4,400 for the supersector with this gain evenly split between educational services and health care and social assistance. Both elementary and secondary schools, and private colleges, universities, and professional schools showed substantial growth. Other strong gains came in nursing and residential care facilities and ambulatory health care services.

Leisure and Hospitality

Leisure and hospitality lost 400 jobs in February following a gain of 1,500 (revised) in January. All of the February loss was in arts, entertainment, and recreation, which was down 700. Accommodation and food services experienced a third consecutive month of growth adding 300 jobs for the month. On an annual basis employment was off 3,100 in February. All of the loss came in arts, entertainment, and recreation, which showed an annual loss of 6,500 as seasonal declines this winter have been large compared to recent years. This decline was partly offset by gains of 3,400 in accommodation and food services of which 3,200 came in accommodation.

Other Services

February estimates showed a monthly gain of 800 jobs in other services on a seasonally adjusted basis. This growth came largely from personal and laundry services. Over the past year employment increased 1.5 percent, equal to 1,700 jobs. There were annual gains in all three component industries with employment up 800 in personal and laundry services, 600 in religious, grantmaking, civic, professional, and related, and 300 in repair and maintenance.

Government

There was essentially no change in government employment over the month of February. Losses of 100 were estimated in each of federal and state government employment. Local government showed an increase of 300 jobs from growth in local government education. Compared to February 2010 the supersector experienced a loss of 600 jobs with most of the component industries showing losses. Federal government fell by 900 and state government was down 500. Local government added 900 as local government, excluding educational services, added 2,100 and easily erased the loss of 1,200 in local government education.

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