Industrial Analysis

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

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

Overview

October seasonally adjusted data showed a gain of 14,100 jobs, easily outweighing a decline of 4,200 in September. With this level of growth it was not surprising that nine of 11 supersectors experienced gains for the month. The largest employment gains were in professional and business services, up 6,500, and in trade, transportation and utilities, up 3,900. Three of the supersectors posted growth of at least 2,000 jobs, including educational and health services, leisure and hospitality, and other services. Government; financial activities; mining and logging; and information all showed small gains for the month. Construction and manufacturing supersectors posted significant monthly losses with each supersector down 2,300. Compared to last year, state estimates showed a gain of 42,100, equal to 1.6 percent. Seven supersectors showed annual growth in October. The largest gains were in educational and health services, which added 14,400, followed by leisure and hospitality, up 13,000. Professional and business services added 9,900, manufacturing was up 8,800, and trade, transportation and utilities increased 7,800. Losses were registered in four supersectors. The largest annual decline was in construction, which fell by 6,500 jobs. Government was down 4,700.

Mining and Logging

Mining and logging added 200 jobs over the  month, posting a level of 5,000 in October. Compared to last year the supersector was up 500 as employment at iron mines was substantially improved.

Construction

Seasonally adjusted data showed a loss of 2,300 construction jobs for October. This largely erased the gain of 3,100 in September. The supersector continues to show a greater proclivity to post monthly losses with six of 10 months showing declines so far in 2010. All three major component industries were substantially weaker for the month particularly specialty trade contractors. Construction employment still showed an annual loss of 6.5 percent, equal to -6,500 jobs. More than 80 percent of the loss was in specialty trade contractors, which declined by 5,300. Construction of buildings was down 1,400 reflecting long weakness in both commercial and residential construction. Heavy and civil engineering construction still showed a slight gain of 200.

Manufacturing

Manufacturing employment was down 2,300 over the month of October, marking the first decline since last May. Durable-goods manufacturing was down 1,400 jobs with somewhat weaker results present in the majority of the more detailed manufacturing industries. Nondurable-goods manufacturing was down 900 for the month. The monthly loss came in areas for which estimates are not prepared as food manufacturing and paper manufacturing and printing and related showed neither strong growth nor loss. With the supersector adding jobs in eight of the last 10 months the rate of annual growth continued to improve moving up to 3 percent in October. Most of the gain in the supersector was in durable-goods manufacturing, which showed an annual gain of 6,500. Computer and electronic product and fabricated metal product manufacturing combined to account for just under half the growth in durable-goods manufacturing. Nondurable-goods manufacturing increased 2,400 the past 12 months with nearly half the gain in food manufacturing.

Trade, Transportation, and Utilities

After a fairly weak summer with losses in June through August, employment has increased the past two months with employment up 3,900 in October following a gain of 800 in September. Job growth was fairly equally divided between transportation, warehousing and utilities; and retail trade, which added 2,400 and 2,100 respectively. These gains outweighed a loss of 600 in wholesale trade. The monthly gain in transportation, warehousing and utilities was largely caused by greater-than-normal seasonal hiring at school bus companies. The increase in retail trade was the first since July and only the third since last February. Expectations for the holiday season are mixed but overall tend to the positive. Over the past year the supersector added 7,800 jobs. The majority of the annual growth came in transportation and warehousing where employment was up 700. The rest of the annual gains came in retail trade with a gain of 6,300.

Information

After showing substantial gains in August and September, the information supersector showed little change in October, up 100 for the month. None of the detailed industry estimates showed anything out of the ordinary for the month. Over the past year the supersector showed a job gain of about 2,100 jobs. All of this gain came from outside publishing industries and telecommunications.

Financial Activities

There was little change in employment in financial activities for the month of October with an increase of 300 over the month. All of this gain was in real estate and rental and leasing. Compared to last year the supersector showed a loss of 800. Growth in insurance carriers and related measured about 1,700, but losses in other areas, particularly in securities, commodity contracts and related and in real estate, outweighed this increase.

Professional and Business Services 

By far the largest employment increase in October was in professional and business services. Nearly all of this gain came in administrative and support, which added 6,500 jobs for the month. Most of the gain came from employment services where employment was up sharply for the month. The rest of the gain came in professional and technical services, which added 700 for the month. Over the past 12 months the supersector added 9,900 jobs, equal to a very solid 3.2 percent. Essentially all of the annual gains were in administrative and support services, which increased 9,600 largely because of increases in employment services, which was up 5,700. Professional, scientific and technical services showed an increase of 500 despite a large loss in computer systems design and related services. Management of companies posted a yearly loss of 200.

Educational and Health Services

Educational and health services posted another strong month of growth adding 2,000 jobs in October. This was the sixth monthly gain in the last seven months including five months of growth of 2,000 or greater. Health and social assistance added 1,100 for the month with small improvements in all of the component industries except for hospitals. This increase was the sixth month of growth in the past seven months. Private education added nearly as many jobs, up 900 for the month. The supersector posted an annual gain equal to 3.2 percent and the largest numeric gain at 14,400. Educational services employment was up 5,200 mostly in educational services. An increase of 9,100 in health care and social assistance reflected growth in all component industries although the largest gain came in social assistance, which added 4,100 jobs.

Leisure and Hospitality

After two months of losses, employment in leisure and hospitality increased 2,300 for the month of October, with 2,000 of the gain coming from accommodation and food services. Compared to October 2009, the supersector was up 5.5 percent, or 13,000. All of the component industries showed substantial growth with gains of more than 4,000 in both full-service restaurants and limited-service eating places. Arts, entertainment and recreation added about 2,600 jobs to the annual growth.

Other Services

Other services added 2,900 jobs in October more than erasing losses posted in the previous two months. The monthly gain was distributed fairly proportionally among the three component industries. The monthly gain contributed to a substantial improvement in annual growth from -5 percent to -2 percent.

Government

A gain of 2,800 jobs in local government outweighed losses in federal and state government to yield a net increase of 500 for the supersector. Local government saw greater-than-normal seasonal hiring after fairly weak performance the past few months. Compared to last year, the supersector showed a loss of 4,700 with local government educational services down 3,300. Federal government lost 700 jobs, all in post offices. There was a minuscule increase in state government.

* 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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