Industrial Analysis

by Jerry Brown - jerry.brown@state.mn.us
May 2010

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

Overview

Minnesota employment estimates showed an increase of 10,200 for April. This increase more than erases the 2,600 jobs lost during February and March. For the year through April, employment increased a net 24,800 jobs. The April increase was experienced fairly broadly with six supersectors showing gains for the month. The most substantial gain came in trade, transportation, and utilities which added 5,700 jobs. Other large gains came in government, up 2,200, educational and health services, up 1,600, and manufacturing, up 1,500. Four supersectors showed monthly loss with the largest being a decline of 900 in other services. The monthly improvement helped once again to lower the rate of annual loss. The rate of annual decline was 0.8 percent in April compared to a decline of 1.6 percent in March. Most of the supersectors have shown substantial improvement in the rate of over-the-year change. There were three supersectors with an annual gain, the largest occurring in professional and business services with 4,500 jobs added. Educational and health services showed an increase of 3,700, and government had 1,200 additional jobs. Losses were still mainly the rule with the other eight supersectors showing annual declines. Most of these supersectors showed improvement with a notable exception being other services where losses increased to 3.8 percent.

Mining and Logging

There was no change to mining and logging employment in April. Compared to last April, employment showed a decline of 1,000 largely caused by employment reductions at mines that occurred in mid-2009.

Construction

There was little change in construction employment with the seasonally adjusted estimate dropping by only 100 in April. This is the second consecutive month with employment essentially unchanged. On an annual basis the supersector showed a drop of 9,300, equal to -10.7 percent. Most of the annual loss was in specialty trade contractors where the 12-month decline was 15.6 percent. Heavy and civil engineering construction showed an annual gain of 1,400 boosted by warm weather and pipeline projects. After a weak beginning to the year, housing permits for the state were up substantially in March and 6.2 percent for the first quarter of 2010 compared to first quarter 2009. Most of the improvement came in permits for single family structures. To some extent this figure may be inflated by extra demand created by the approaching deadline for the home purchase tax credit.

Manufacturing

Manufacturing added 1,500 jobs in April with 1,200 of the jobs coming in durable-goods manufacturing. Areas showing positive movement included machinery, wood product, transportation equipment, fabricated metal, and computer and electronic product manufacturing industries. Nondurable-goods manufacturing contributed a gain of 300 largely with increases in paper manufacturing and printing and related support activities. Food manufacturing was weaker for the month. The recent gains are in line with improvements in manufacturing indicators like the Purchasing Managers' Index, which measured 60.4 in April and has been increasing for the last nine months. Some of this activity is from replenishing inventories that were allowed to drop. Over-the-year growth measured -2.7 percent, a substantial improvement compared to recent months. Major losses were still present in fabricated metal product manufacturing, machinery manufacturing, computer and electronic production manufacturing, paper manufacturing, and printing and related support activities.

Trade, Transportation, and Utilities (TTU)

The majority of monthly employment gains came in trade, transportation, and utilities where 5,700 jobs were added. Essentially all of this growth came from retail trade which added 6,500 jobs for the month as wholesale trade added only 100 jobs. These gains were partly offset by a loss of 900 in transportation, warehousing, and utilities. The gain in retail trade was the third strong gain in the past four months during which time retail employment has added 12,600 jobs. U.S. retail sales has increased each of the past six months with the April advanced retail trade estimate showing a 0.4 percent monthly increase and 8.8 percent over the previous year. The employment growth indicates that retailers have some confidence that the increase in sales is sustainable. Over the past year the supersector showed a decline of 1,100 jobs. The improvement in retail trade in recent months is evident in the gain of 4,700 jobs over the past year, particularly in general merchandise stores where 2,400 jobs were added. This gain was offset by a loss of more than 5,700 in transportation and warehousing and a decline of 100 in wholesale trade.

Information

Employment in information industries increased by 300 for April, following a loss of 500 (revised) in March. Much of the increase was caused by small improvements in publishing industries. Over the past year the supersector showed a loss of 700, mainly from declines in publishing industries.

Financial Activities

After a one month reprieve, financial activities showed the fourth decline in the last five months, down 500 jobs in April. The monthly loss was centered in finance and insurance where 1,200 jobs were lost. The largest part of the monthly decline came in insurance carriers and related activities although every industry in finance and insurance showed weaker results. Real estate and rental offset part of the loss in finance and insurance with a gain of 700. On an annual basis the supersector showed a decline of 3,900 jobs. The largest areas of loss over the year included securities, commodity contracts, and other related, down 1,600, real estate, down 1,300, and depository credit intermediation, down 900.

Professional and Business Services (PBS)

After fairly strong results between October 2009 and February 2010, professional and business services posted two consecutive months of job decline, down 1,200 in March (revised) and 300 in April. Professional, scientific, and technical services employment was a positive area in April showing a gain of 1,100. All of the more detailed industry estimates for professional, scientific, and technical services showed positive results for the month. This gain was erased by losses in management of companies, down 600, and in administrative and support services, down 800. Of note was substantial weakness in employment services. Over the past year employment in the supersector increased 4,500 jobs with all of the gain from an increase of 9,800 jobs in administrative and support services, which outweighed losses of 2,800 and 2,600 in professional, scientific, and technical services and in management of companies, respectively.

Educational and Health Services

Employment increased 1,600 jobs in educational and health services for April. There was an addition of 1,200 in private education with most of the gain coming outside of private primary and secondary schools and private colleges. There was an increase of 400 in health care and social assistance, largely in ambulatory health care services. Over the past year the supersector added 3,700 jobs, with about 2,300 of the increase in health care and social assistance. These increases are much smaller than have been the rule in recent years. In large part this has been caused by the gradual weakening of growth in hospitals and ambulatory health care.

Leisure and Hospitality

With favorable weather, seasonal industries like golf courses saw larger-than-usual employment gains in April causing an increase of 900 in arts, entertainment, and recreation. This gain erased a small loss in accommodation and food services yielding a net seasonally adjusted monthly increase of 700 for the supersector. On an annual basis the supersector lost 2,700 jobs as employment in art, entertainment, and recreation has failed to regain the losses experienced last winter, and declines in accommodation have nearly offset gains made in food services and drinking places.

Other Services

Employment in other services fell a third consecutive month, down 900 for April. The losses were distributed across the three industry components of the supersector. Losses in six of the past seven months have contributed to a substantial decline compared to year-ago data with employment down 4,400 compared to April 2009. Losses ranged from 3.1 percent to 4.8 percent among the component industries.

Government

Government added 2,200 jobs in April. A spike in non-education hiring in local government was the main cause of the addition of 1,800 jobs in local government. This may be accounted for by early hiring for seasonal work like operating municipal golf courses, landscaping, and the like. The effect of Census Bureau hiring was limited with only 300 additions in federal government. Over the past year government employment increased by 1,200. The increase came largely from Census hiring and higher levels in local government. Local government was showing over-the-year losses in recent months including a loss of 600 in March (revised). The over-the-year gain of 1,100 is very likely the result of somewhat altered seasonal hiring patterns.

* 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.

Top