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Industrial Analysis

by Nick Dobbins
nicholas.dobbins@state.mn.us

September 2015

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

Overview

Minnesota added 7,300 jobs (0.3 percent), seasonally adjusted, for a strong August performance. At the same time, July's employment estimates were revised upward from a loss of 3,900 to a loss of just 1,100. The growth was in large part from employment increases in Professional and Business Services and Leisure and Hospitality, each of which added 4,600 jobs (1.3 percent and 1.8 percent, respectively). While many other supersectors also saw employment growth, the expansions were tempered by job losses in a couple of key industries led by Government employment, which was down by 5,000 (1.2 percent). For the year Minnesota added 38,037 jobs (1.3 percent). Service providers (up 39,611 or 1.7 percent) accounted for all of that growth, as goods producers lost 1,574 jobs (0.4 percent). The supersector with the most growth was Educational and Health Services, which added 15,721 jobs (3.2 percent). The steepest losses came in Government employment, which was down 1,985 jobs (0.5 percent).

Mining and Logging

Employment in Mining and Logging was up by 200 jobs (3.1 percent) in August. It was the supersector's second straight month of growth, following a difficult year during which it had added jobs in only one of the previous 12 months. Employment remains down on an annual basis. It has shown some improvement, however, as it was down 466 jobs (6.1 percent) in August, after being off by 887 (11.7 percent) in July.

Construction

Employment in Construction was down in August, off by 200 jobs (0.2 percent) from July estimates. Combined with July's loss of 2,000 jobs, the previous two months have given back nearly all of the 2,500 jobs added in June. August also represents the first time since March that the supersector lost jobs over the year, as it was down by 525 (0.4 percent) from August of 2014. The addition of 121 jobs (1.0 percent) in Residential Building Construction was not enough to overcome significant losses in Heavy and Civil Engineering Construction (down 946, 4.7 percent) and Specialty Trade Contractors (down 1,199, 1.6 percent).

Manufacturing

Manufacturing employment was down last month as the supersector shed 1,000 jobs (0.3 percent). A loss of 2,200 jobs (2.0 percent) in Non-Durable Goods Manufacturing more than erased the gain of 1,200 (0.6 percent) in its Durable Goods counterpart. August marked the fourth straight month of job losses in Manufacturing. As in Construction, the poor performance was enough to push the supersector into negative over-the-year growth as well, as Manufacturing employment was down 583 (0.2 percent) from August of 2014. These were the first such job losses in the industry since the tail end of the recession in 2010, putting the cap on what ended up being a rough month for Minnesota's goods producers.

Trade, Transportation, and Utilities

Employment growth in Trade, Transportation, and Utilities was essentially flat in August as the supersector lost 200 jobs (0.0 percent). Retail Trade lost 1,400 jobs (0.5 percent) while Wholesale Trade added 900 (0.7 percent), and Transportation, Warehousing, and Utilities added 300 (0.3 percent). Employment in the supersector remained up on the year, adding 5,098 jobs (1 percent) since August of 2014. The large majority of those jobs came in Retail Trade, which was up 5,315 jobs (1.8 percent). Transportation, Warehousing, and Utilities added just 130 jobs (0.1 percent) on the year, while Wholesale Trade actually lost 347 jobs (0.3 percent).

Information

Employment in the Information supersector was up by 200 (0.4 percent) in August. That marked the second straight month of growth in Information employment, the first time that has happened since 2014. Over the year, Information employment remained down, off 414 jobs (0.8 percent) from August 2014. Both published component sectors lost jobs, with Publishing Industries (except Internet) losing 661 jobs (3.2 percent) and Telecommunications losing 231 (1.7 percent).

Financial Activities

Employment in Financial Activities showed strong growth in August, adding 1,600 jobs (0.9 percent). Both component sectors grew, with Finance and Insurance adding 700 jobs (0.5 percent) and Real Estate and Rental and Leasing adding 900 (2.3 percent). For the year, the supersector added 3,590 jobs (2 percent). Finance and Insurance added 2,613 jobs (1.9 percent), with most of that growth coming from Insurance Carriers and Related Activities (up 2,389 or 3.6 percent). Real Estate and Rental and Leasing added 977 jobs (2.4 percent).

Professional and Business Services

Professional and Business Services added 4,600 jobs (1.3 percent) in August as two of its three component sectors had a strong month of growth. Professional, Scientific, and Technical Services added 2,100 jobs (1.5 percent) while Administrative and Support and Waste Management and Remediation Services added 3,200 jobs (2.3 percent). Management of Companies and Enterprises lost 700 jobs (0.9 percent). Employment in the supersector remains very strong over the year, up 10,817 (3 percent) from August 2014.

Educational and Health Services

Educational and Health Services added 2,900 jobs (0.6 percent) in August. Growth of 5,000 jobs (1.1 percent) in Health Care and Social Assistance was more than enough to overcome losses of 2,100 jobs (2.9 percent) in Educational Services. Over the year, the supersector added 15,721, with both component sectors maintaining strong annual growth of better than 2 percent.

Leisure and Hospitality

Leisure and Hospitality employment was up by 4,600 (1.8 percent) in August. Arts, Entertainment, and Recreation added 3,100 jobs (7.3 percent) while Accommodation and Food Services added 1,500. The job growth in this supersector is notable in part because it employs a large proportion of minimum wage earners. A mandated $.50 increase to the minimum wage went into effect at the beginning of August, a move which some speculate may work to drive down employment in the state. (Hourly earnings estimates did indeed increase by $.50 in the supersector last month as well.) Annual employment remains up in the supersector as well, with 7,871 (2.9 percent) more jobs than in August of 2014.

Other Services

Other Services employment was down slightly in August, shedding 400 jobs (0.3 percent) on the month. Employment remains down on the year as well, off 1,087 jobs (0.9 percent) from August 2014. Most of that loss comes from the Religious, Grantmaking, Civic, Professional, and Similar Organizations sector, which lost 1,294 jobs (2 percent) from August 2014 estimates.

Government

Government employers had a rough August, losing 5,000 jobs (1.2 percent). The large loss came almost entirely from Local Government, which was down 5,100 (1.8 percent), likely caused by a change in the staffing pattern for local schools between summer 2014 and 2015. Annual employment returned to the red as well in August, with Government employers losing 1,985 jobs (0.5 percent) from August 2014, after briefly reaching positive annual growth in July.


Seasonally Adjusted Nonfarm Employment
(in thousands)
Industry August 2015 July 2015 June 2015
Total Nonfarm 2,863.4 2,856.1 2,857.2
Goods-Producing 428.0 429.0 431.0
Mining and Logging 6.7 6.5 6.2
Construction 108.2 108.4 110.4
Manufacturing 313.1 314.1 314.4
Service-Providing 2,435.4 2,427.1 2,426.2
Trade, Transportation, and Utilities 524.7 524.9 526.6
Information 53.0 52.8 52.6
Financial Activities 182.7 181.1 180.4
Professional and Business Services 364.9 360.3 358.4
Educational and Health Services 516.3 513.4 514.4
Leisure and Hospitality 262.5 257.9 261.7
Other Services 114.0 114.4 114.4
Government 417.3 422.3 417.7
Source: Department of Employment and Economic Development, Current Employment Statistics, 2015.



bar graph-Minnesota Employment Growth, August 2014 to August 2015



*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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