Industrial Analysis

by Jerry Brown
October 2011

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

Overview

Minnesota employment fell 7,400 in September after a large August gain. The key to the decline was private employment where employment was down 14,400. This marked the end of a strong run of growth in the private sector which added 43,600 jobs May through August. Six of the 11 supersectors showed employment loss for the month with four of the losses being quite substantial. Trade, transportation, and utilities was down 4,800 to post the largest loss followed by leisure and hospitality, down 3,800, manufacturing, down 3,700, and educational and health services, down 2,300. Somewhat smaller losses occurred in construction and in professional and business services. Despite the loss employment remained up 34,300 January through September. Since employment bottomed out in September 2009, 53,600 jobs have been added, only about one-third the 158,300 jobs lost between February 2008 and September 2009.  With the weak monthly results the rate of over-the-year growth weakened substantially to a gain of 1.0 percent, just below the national rate of 1.1 percent. Eight of 11 supersectors showed annual growth. The two largest gains were in trade, transportation, and utilities and in educational and health services which added 7,100 and 7,000 jobs respectively. Leisure and hospitality added 5,700 and professional and business services was up 5,600. Rounding out the growth were manufacturing, up 4,000, financial activities, up 2,500, other services, up 2,200, and mining and logging, up 100. Of the three supersectors with losses, government was down the most at -3,800 followed by construction at -1,700 and information at -1,000.

Mining and Logging

There were 100 jobs added over the past month in mining and logging. The supersector continued to show small monthly losses or gains with no readily identifiable trend in 2011. Over the past year the supersector showed a gain of 100.

Construction

Construction employment was down by 1,900 in September, a somewhat disappointing result after gains were posted from May through August. The monthly loss was largely from very weak results in specialty trade contractors. The rate of annual change weakened to -1.8 percent after nearly reaching positive territory in August when annual loss was only -0.1 percent. The annual loss was centered in specialty trade contractors where a loss of 2,600 was estimated. The remainder of the loss came in heavy and civil engineering construction which was off by 900 as well. Construction of buildings has become firmly entrenched in positive territory posting a fourth positive month in September and a gain of 8.2 percent. It should be remembered that the employment level for construction of buildings was still at the lowest level for a September since 1995.

Manufacturing

A loss of 3,700 in manufacturing for the month erased a good portion of the gains made in the previous three months with a net remaining gain of 2,000 for the four months. Most of the monthly loss was from nondurable goods which fell by 2,400, the first loss since last April with a majority of the decline coming from food manufacturing. The Creighton University Economic Outlook Survey Index was above growth neutral at 55.3 in September but was down from 56.3 last month. This indicates that conditions are present for growth but only on a limited basis. The poor monthly result helped push the over-the-year rate of growth down to 1.4 percent for the supersector. Nondurable goods manufacturing was down from 2.7 percent in August to 0.4 percent in September. Food manufacturing was off 2.1 percent, and printing and related support was down 3.1 percent. Durable goods manufacturing showed a gain of 2.0 percent, equal to 3,600. Machinery manufacturing showed the strongest growth in durable goods manufacturing, adding 1,500 jobs. Miscellaneous manufacturing and computer and electronic product manufacturing were both up 500 for the year.

Trade, Transportation, and Utilities

Employment in trade, transportation, and utilities showed a decline of 4,800 in September. This followed gains of 14,600 during the previous four months. A large part of the monthly loss was in wholesale trade which fell by 2,400 after adding 3,700 in August. This was not unexpected as there is often some reversal in the month following a major change. Essentially all the wholesaling loss was in nondurable goods wholesaling. The remainder of the loss came from transportation, warehousing, and utilities which was down 2,600 to post its first loss since February. There was little change in retail trade. On an annual basis trade, transportation, and utilities showed an increase of 7,100. Half of the growth was in wholesale trade with a gain of 3,500, especially from nondurable goods wholesaling. Transportation, warehousing, and utilities added 2,200, and retail trade was up 1,300.

Information

There was no monthly change registered in information in September, which was actually an improvement after three consecutive monthly losses for the supersector. Losses of the previous months were largely responsible for a loss of 1,000 over the past year. Most of the annual decline was in publishing industries.

Financial Activities

Financial activities employment has seen a bit of a rebound in recent months with 1,300 jobs added in September and has not shown a loss since April during which time a net 4,200 jobs were added. Prior to the most recent five months, the supersector experienced a prolonged period of weakness. All of the monthly increase came in finance and insurance. The success in recent months has led to substantial improvement in measures of annual change. The supersector has posted an annual increase in each of the past three months ending five years of losses. September showed an increase of 1.5 percent, equal to 2,500 jobs. All of this growth came in finance and insurance which added over 4,000 jobs. Insurance carriers were the main source of this gain. Real estate and rental and leasing fell by 1,600 to erase a portion of these gains.

Professional and Business Services 

Employment in professional and business services lost 900 jobs for the month. This was the second monthly loss over the past six months. All of the decline came from administrative and support services which has lost employment three of the past four months and was down 1,900 in September. Countering this was a gain of 900 in professional and technical services and an increase of 100 in management of companies. On an annual basis the supersector added 5,600 jobs, an increase of 1.8 percent. This is down from a peak increase of 3.5 percent experience last May, but still the third highest rate of growth among supersectors. Most of the annual gain came from professional, scientific, and technical services with 4,000 additional jobs. Management of companies added 1,000. The biggest change in recent months has been the weakening of growth in administrative and support services which showed a gain of 0.5 percent, down from 6.3 percent last May.

Educational and Health Services

There was a loss of 2,300 jobs in educational and health services for September. The majority of the loss came in private educational services with a decline of 1,800. Healthcare and social assistance posted a loss for the first time since January, down 500 for the month. Compared to last September the supersector showed an increase of 7,000. All of this gain came from health care and social assistance with an increase of 7,800. Ambulatory health care added 4,800 jobs, followed by a gain of 2,900 in nursing and residential care facilities. There was little change to hospitals or social assistance.

Leisure and Hospitality

Leisure and hospitality experienced a second consecutive large monthly employment decline, down 3,800, following a loss of 3,900 in August. Despite this the supersector remained up 8,200 over the first nine months of 2011. Accommodation and food service was responsible for nearly all the weakness the past two months with losses of 3,500 and 3,900 in August and September. The supersector showed a gain of 5,700 compared to a year ago, with a great deal of the increase coming in accommodation where 4,200 jobs were added. Food services and drinking places also contributed 1,700 additional jobs.

Other Services

Other services added 1,600 jobs for the month on the strength of gains made in religious, grantmaking, civic, professional, and related industries. On an annual basis the supersector showed a gain of 2,200 with nearly all the growth registered in religious, grantmaking, civic, professional, and related industries. 

Government

Acting as a counter to the losses in private industries, government added 7,000 jobs in September. Local government was the locus of nearly all of the job gains for the month. The gain was in large part caused by sharp growth in local government education where the September increase was sharper than usual. It is quite possible that this fast growth reflects seasonal hiring being shifted forward into September and will result in smaller than usual additions in October. Over the past year government employment was off 3,800 with losses posted in every component industry except local government non-education employment.     

Top