Industrial Analysis

by Jerry Brown
September 2011

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

Overview

Minnesota employment bounced back from a loss of 12,900 in July (revised) to add 28,400 jobs in August. The main story in August was the return of more than 21,000 laid-off state workers following the passage of the new state budget. Excluding government employment, private-sector job growth was 5,800 in August and has grown by 42,500 the past five months. Six supersectors showed monthly growth. The strongest gains outside government were in trade, transportation, and utilities, up 4,100; construction, up 2,200; and educational and health services, up 1,400. Only leisure and hospitality showed a substantial decline for the month, down 3,300. The rate of annual growth rebounded to 1.7 percent in August, compared to a national rate of 1.0 percent. Growth among private firms was even stronger at 2.1 percent. After good results the past six months, leisure and hospitality has both the highest rate of growth at 4.9 percent and is tied with trade, transportation, and utilities for the greatest numerical increase at 12,400. Other large increases came in educational and health services, manufacturing, and professional and business services with gains of 11,200, 7,100, and 5,400 respectively.

Mining and Logging

There was no change in employment in mining and logging over the past month. The supersector added 150 jobs over the past year.

Construction

Construction added 2,200 jobs over the last month. This gain reversed the 1,700 loss in July and continues relatively strong construction growth in 2011. Since a large decline in April, the supersector has added 7,500 jobs. All three of the major components were strongly positive for the month. The growth in recent months has led to an improvement in the over-the-year rate of growth to the point that the supersector now shows a loss of only 100. Construction of buildings showed an increase of 1,700.

Manufacturing

Employment was up 1,200 in manufacturing in August. All of the gain came in nondurable goods manufacturing which added 1,400. The detailed nondurable goods manufacturing industries showed positive results with food manufacturing accounting for a substantial part of the increase. Durable goods manufacturing was a mixed bag in terms of growth leading to a loss of 200 for the month. Over the past year the supersector showed a gain of 7,100 with the numeric gains about equally split between durable and nondurable goods manufacturing. The strongest growth in the detailed industries was in machinery manufacturing, up 1,400, and in fabricated metal product manufacturing, up 800.

Trade, Transportation, and Utilities

The strongest growth outside of government came in trade, transportation, and utilities with a gain of 4,100 jobs. Wholesale trade, and particularly nondurable goods wholesaling, accounted for the vast majority of the gain with an increase of 3,300.  Transportation, warehousing, and utilities added 600 with the growth coming outside trucking and couriers and messengers. Retail trade added only 200 jobs but this was the third month of gain for retail trade. Department stores experienced a fairly weak month.  Over the past year the supersector added 12,400 jobs. Wholesale trade accounted for 5,000 of the gains with nondurable goods wholesaling up by 6,100. Retail was up 2,200 with most of the growth coming from areas not estimated. Transportation and warehousing increased by 5,400 over 12 months. The most recent Census preliminary estimate of August retail trade showed little change from July, well below expectations and likely stemming from low consumer confidence and lack of income growth.  

Information

There was little change in information employment with a loss of 100 estimated. All the estimated component industries showed slightly weaker results for the month. Over the past year the supersector showed a loss of 1,200. Publishing industries showed a loss of 800 and telecommunications was down 200.

Financial Activities

Financial activities was down 200 in August following three consecutive months of job growth. Since April the supersector was up 2,700. Most of the gains have been in finance and insurance which showed a gain of 500 for the month. Real estate and rental and leasing was down 700 and has lost employment four of the past six months. Over the past year the supersector was up 500. All of the growth occurred in finance and insurance with a gain of 2,200 with nearly all of the increase in insurance carriers. Creating a drag on employment was real estate and rental and leasing with a loss of 1,700.

Professional and Business Services

Professional and business services employment increased 700 in August. This was the fourth gain in the past six months during which time the supersector added 3,800.  Professional and technical services added 400 for the month. All of the remaining growth came in administrative and support services, from gains in employment services. Over the past year the supersector showed a gain of 5,400. More than 75 percent of the increase came in administrative and support with an increase of 4,200 as employment services added 5,300 jobs. Management of companies also posted a solid annual increase of 1,200. Even with strong growth the past two years the supersector is far from regaining the
pre-recession peak. Employment for the month of August is still below the level of August 2006.

Educational and Health Services

Gains in both education and health care industries led to an increase of 1,400 over the past month in the education and health care supersector. Health care and social assistance added 800 jobs for the month with hospitals showing the best growth. Educational services added 600 despite the fact that colleges and universities had a relatively weak showing. On an annual basis the supersector was up 11,200 with good growth in the two major component sectors. Educational services was up 2,400 with private colleges and universities accounting for most of the increase. Health care and social assistance was up 8,800 with more than 50 percent of the gain in ambulatory health care, and most of the remaining growth came from nursing and residential care facilities where 3,300 jobs were added. Social assistance posted a loss of 300.

Leisure and Hospitality

Leisure and hospitality employment was down 3,300 following strong growth during the previous five months. Nearly all of the monthly loss came in accommodation and food services where employment fell 3,200. Even with the large August loss the supersector is up 11,300 since February. Most of this increase has been in accommodation and food services which has increased seven of the past nine months. The consistency of growth during 2011 has created an annual gain of 4.9 percent. The numeric increase was 12,400 to equal trade, transportation, and utilities in adding the most jobs over the past 12 months. Accommodation accounted for 4,700 of the annual increase, and food services and drinking places showed a gain of 6,800.

Other Services

There was a small monthly decline of 200 in other services employment for August.  Over the past year the supersector showed a loss of 1,100. Declines of 1,700 and 400 in religious, grantmaking, civic, professional, and similar service and in repair and maintenance, respectively, easily erased a gain of about 1,000 in personal and laundry services.

Government

Government employment increased 22,600 in August. The return of state employees from a July layoff accounted for 22,400 of the increase. Outside of state government there was an increase of 200 in federal government and no change in local government.  Since June the supersector is down 4,000, mostly from losses in local government. Over the past year government employment was estimated to be down 2,600, representing a mix of results. Federal government was down 1,900 largely because of the presence of temporary census workers last August. State government was down 1,000 with all of the losses in non-educational state employment. Local government showed a slight gain as losses in local government education were erased by gains in non-educational local government employment.

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