Industrial Analysis

Jerry Brown- jerry.brown@state.mn.us
September 2009

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

Overview

After the refreshing employment gain posted in July, job losses returned in August. From July to August employment levels fell 10,300, erasing all of the gain posted in July. Further, the July gain was revised downward by 2,600 as several supersectors showed reduced final estimates including a revision of 1,600 in government. In August four supersectors showed declines in excess of 2,000. The largest of these was a drop of 3,200 in leisure and hospitality. Trade, transportation, and utilities fell by 3,000; educational and health services was down 2,200; and government was off 2,100 jobs. Overall, losses occurred in eight of 11 supersectors. The only sizeable gain was the addition of 1,300 positions in professional and business services. The strong monthly loss drove the over-the-year loss from -3.8 percent in July to -4.3 percent in August, slightly below the -4.4 rate for the U.S. The distribution of the annual loss is essentially the same as in past months with manufacturing, professional and business services, trade, transportation, and utilities, and construction still posting very large declines since last August. Only educational and health services showed substantial annual growth, up 11,600. Government employment was up 700.

Mining and Logging

Mining and logging showed a slight loss in August of 100 jobs from losses in the mining industries. Annually, losses equaled 2,100, caused by previous losses in iron ore mining.

Construction

Construction employment showed only a small loss of 300 jobs for the month of August, with some weakness in specialty trade contractors. Over the last five months the supersector lost 1,600 jobs. By comparison, the five months previous to this period saw a decline of 11,100. The rate of annual loss improved somewhat to -13.1 percent. Large annual losses still remain in all the industry components including -17.9 percent in construction of buildings and -13 percent in specialty trade contractors.

Manufacturing

While a decline of 900 in August is moderate compared to the scale of monthly losses over the past year, it was nonetheless disappointing to see July’s gain of 800 jobs completely erased the very next month. Further, all of the loss came in durable-goods manufacturing where a decline of 3,000 wiped out gains in nondurable-goods manufacturing. This continued a trend of large declines in durable-goods manufacturing since January 2009 during which time durable-goods manufacturing lost 28,100 jobs. Durable-goods industries were generally weaker with losses being particularly large in computer and electronic product manufacturing. Meanwhile, employment in nondurable-goods industries was up substantially with all the estimated industries showing gains. On an annual basis the supersector posted a loss of 11.7 percent equal to July’s registered loss (revised). Most of the drop was in durable-goods manufacturing, which showed an annual loss of 33,300 in August. All of the estimated component industries showed losses with most posting losses in excess of 10 percent. Wood product, fabricated metal, machinery, computer and electronic products, and transportation equipment manufacturing all showed very large losses. Nondurable-goods manufacturing was down nearly 6,800 over the past year, particularly in paper manufacturing and in printing and related.

Trade, Transportation, and Utilities (TTU)

Trade, transportation, and utilities employment fell by 3,000 in August. During 2009 employment has fallen six of eight months. Retail trade added 600 jobs for the month, but this was erased by an decrease of 1,800 each in wholesale trade and in transportation, warehousing, and utilities. Wholesale losses were largely in durable-goods wholesaling. About half the losses in transportation, warehousing, and utilities came in trucking. Over the past 12 months the supersector lost 24,800 jobs. Transportation, warehousing, and utilities was down 9,100 with about 2,600 of this coming in truck transportation. Wholesale trade was down 8,700 with about 60 percent of this in durable-goods wholesaling. Retail trade employment fell by more than 7,000 with large drops in motor vehicle and parts dealers, food and beverage stores, and miscellaneous store retailers.

Information

A gain of 300 jobs in August represented the first monthly increase since January. Over the past year this supersector’s employment is down 5.2 percent. A large part of this loss has been in publishing industries.

Financial Activities

There was a modest decline of 500 jobs in financial activities, entirely from real estate and rental and leasing, which was down 700. This loss followed a gain of 1,600 last month. The supersector lost 2,400 jobs over the past year. Nearly 1,700 of this loss came in real estate and rental and leasing. The only industry still showing annual growth was insurance carriers where 700 jobs were added the past year.

Professional and Business Services (PBS)

Professional and business services employment increased 1,300 for the month of August. All of the growth came in administrative and support, which was up 1,800 for the month. Employment in professional and technical services and in management of companies fell slightly for the month. The supersector showed a loss of 33,900 equal to 10.1 percent in the past year. More than half the loss came in administrative and support and in waste services. One-third of the loss came in professional, scientific, and technical services. Employment services still showed a very large decline equal to 17.9 percent.

Educational and Health Services

August estimates showed a loss of 2,200 in educational and health services. This was the third monthly loss in the last four months including two losses in excess of 2,000. The August reduction was mainly in health and social assistance, down 1,500. Ambulatory health services showed very weak monthly results along with poor performance  both in social assistance and in  nursing and residential care facilities. The supersector added 11,600 jobs over the last year. Growth is still fairly strong at 2.6 percent but this is down from a gain of 4.4 percent posted in April. Growth has been substantially weaker in ambulatory health care and hospitals. Both of these industry groupings have experienced a decline in the rate of annual growth in excess of 2 percentage points since April’s peak.

Leisure and Hospitality

The largest monthly loss came in leisure and hospitality where employment fell by 3,200. Of this, about 2,100 jobs were lost in accommodation and food services mainly in limited-service eating places and accommodation. Arts, entertainment, and recreation posted a loss over the month in the unadjusted data rather than the usual small gain thereby contributing a seasonally adjusted loss of 1,100 for August. In recent months there have been alternating losses and gains. The supersector showed a loss of 5,300 over the past year. About 2,900 of this loss came in arts, entertainment, and recreation with the remainder in accommodation and food services. Accommodation was down 5.2 percent over the year.

Other Services

The addition of 400 jobs in other services marked the first gain in this supersector since March. Losses were not particularly prevalent in any one of the component industries. Over the past year other services employment has fallen by 4,700, a 3.9 percent loss. This decline was distributed throughout component industries but the rate of loss in repair and maintenance was very rapid, down 7.1 percent.

Government

A sizeable loss in local government, down 1,600 jobs, was the major reason for a decline of 2,100 jobs in government. The supersector has alternated between job losses and gains the last six months yielding a net loss of 1,900 for the period. A small annual gain of 700 jobs was indicated by the estimates. All of this gain was in local government as losses in post offices and in state government education led to a decline in federal and state government employment.

* 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.