Industrial Analysis

by Jerry Brown and Amanda Rohrer 
July 2013

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

Overview

Employment increased by 400 in June 2013, an outcome of very mixed results across industries as five supersectors experienced employment growth and six posted monthly declines. There were three industries that accounted for nearly all of the monthly growth. Chief among the growing industries was Administrative and Support Services which added a very robust 4,700 jobs. The other large increases came in Accommodation and Food Services with a gain of 1,800 and in Wholesale Trade which increased 1,200. Retail Trade added 700 jobs as well. Losses were less concentrated, with the largest decline a loss of 2,800 in State Government. Real Estate and Rental and Leasing, Construction, Manufacturing, and Information all showed losses ranging from 1,100 to 900. The rate of over-the-year change improved to 2.0 percent compared to U.S. annual growth of 1.7 percent. Three supersectors showed annual growth of over 4 percent including Professional and Business Services, Logging and Mining, and Leisure and Hospitality. Two supersectors showed annual losses. Manufacturing has weakened in recent months to show a loss of 0.5 percent in June. The other loss was in Other Services, down 1.1 percent.

Mining and Logging

Mining and Logging employment grew by 200 in June, the largest monthly gain since October 2011. Compared to last year employment estimates showed an increase of 300 jobs. The improvements are certainly being impacted by some improvement in construction and thereby an increase in demand for construction aggregates.

Construction

Construction employment reversed track in June to post a loss of 1,000, erasing most of the gains made in May. Most of this loss was centered in Specialty Trade Construction. While such a loss is disappointing in the face of a myriad of indicators that show improvement in the housing market, it doesn’t completely reverse the gradual growth of recent months. In the past nine months Construction employment increased six times against three losses. On an annual basis estimates showed an increase of 2,100 jobs (2.0 percent).

Manufacturing

Manufacturing has been experiencing a period of weak job results. The June estimate indicated a loss of 1,000 with both Durable and Nondurable Goods Manufacturing posting monthly losses. The supersector has posted losses in four of the last five months to produce a net loss of 3,200 during this time. Both Durable and Nondurable Goods have shown these weakened results. As a result of these recent losses, employment growth compared to one year ago turned negative for the first time since June 2010. Small annual losses were common across detailed manufacturing industries with the largest loss in food manufacturing, down 1,100.

Trade, Transportation, and Utilities

On a seasonally adjusted basis, employment in Trade, Transportation, and Utilities increased 1,900 for the month. This follows two months of declines in an otherwise positive year. Although growth in the industry hasn’t been very rapid, seasonally adjusted employment levels for 2013 are on par with 2008. Within the sector Wholesale Trade fared best, increasing 0.9 percent over the month. This has been an ongoing trend as Retail Trade continues to grow in fits and starts (up only 0.2 percent this month, 700), and the much smaller category of Transportation, Warehousing, and Utilities was flat for the month and had inconsistent growth recently.

Information

June marked a second consecutive large loss in Information employment with a monthly decline of 900 (1.6 percent) resulting in a net decline of 1,500 over the two months. These losses end a period of growth from October 2012 to April 2013 when 1,900 jobs were added.

Financial Activities

In the third loss of the past four months, employment in Financial Activities fell 1,200 (0.7%), producing an overall decline of 2,000 jobs over this period. There have not been any large announced layoffs in this supersector. The June loss was essentially caused by declines in Real Estate and Rental and Leasing, but job growth in the supersector has been hurt by a lack of growth in Insurance Carriers which had been providing substantial job growth until recent months.

Professional and Business Services

Professional and Business Services employment increased 3,600 (1.0%). The industry has been trending strongly upward since October 2012 with only one monthly loss since that time and a net gain of 15,300 for the period. All three of the major component industries have contributed to this growth but individually have been less consistent in their growth patterns. In the current month all of the supersector growth comes from Administrative and Support and Waste Management, which increased 4,700 (3.5 percent).

Educational and Health Services

Overall, employment in Educational and Health Services increased 100 (0.0%) for June. Health Care and Social Assistance fell slightly (down 100, 0.0 percent change), but was balanced out by a growth of 200 (0.3 percent) in Private Education.

Leisure and Hospitality

In June employment in Leisure and Hospitality grew 1,400 (0.6 percent). In 2012 Leisure and Hospitality surpassed pre-recession levels and has continued to grow, although with a few hesitations. Food Services has been responsible for more of the growth, with the other major sub-industry, Arts, Entertainment, and Recreation, falling moderately in each of the last four months.

Other Services

The employment decline of 600 (0.5 percent) in Other Services nearly cancels out last month’s growth in an industry that has remained fairly stable for the last few years.

Government

Employment in Government fell 2,100 (0.5 percent) over the month. There have been seven monthly losses in the industry in the past year. This month the decline stemmed from State Government job losses of 2,800 (2.8 percent).

Chart: Minnesota Employment Growth June 2012 to June 2013

Seasonally Adjusted Nonfarm Employment
(in thousands)

June
2013

May
2013

April
2013

Total Nonfarm

2,772.5

2,772.1

2,761.8

Goods-Producing

409.7

411.5

410.3

Mining and Logging

7.4

7.2

7.3

Construction

97.6

98.6

97.4

Manufacturing

304.7

305.7

305.6

Service-Providing

2,362.8

2,360.6

2,351.5

Trade, Transportation, and Utilities

511.4

509.5

511.2

Information

53.8

54.7

55.3

Financial Activities

177.3

178.5

178.3

Professional and Business Services

351.6

348.0

346.0

Educational and Health Services

488.3

488.2

486.7

Leisure and Hospitality

250.6

249.2

247.7

Other Services

116.4

117.0

116.0

Government

413.4

415.5

410.3

Source: Department of Employment and Economic Development,
Current Employment Statistics, 2013

* 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.