Central Minnesota is a manufacturing stronghold, with several global manufacturing firms operating there.
The region is especially well known for its expertise in food processing, printing, furniture manufacturing, appliances, machinery and heavy equipment manufacturing.
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8/3/2020 9:00:00 AM
Now more than four months into the COVD-19 pandemic, businesses and organizations in Central Minnesota – and across the United States – have attempted to mitigate risk in many different ways. Unfortunately, cases of COVID-19 continue to happen, and have been rising in recent weeks. The good news is that weekly Unemployment Insurance (UI) applications for nearly all industries are a fraction of what they were in mid- to- late March, but the cumulative scale of the layoffs is unprecedented. A few industries of concern in Central Minnesota are health care and social assistance, accommodation and food services, manufacturing, and administrative support and waste management services.
The largest industry in terms of employment is health care and social assistance, accounting for 18% of all jobs in Central Minnesota. The region's health care systems have not been spared from economic hardship in the current crisis, but they do appear to be doing better than expected, at least when looking at a comparison of the share of continuing UI claims (14.9%) to share of employment (18%). However, the share of initial UI claims (17.6%) for May in the healthcare and social assistance industry closely matches the share of employment, and more claims were filed from health care and social assistance workers than from any other industry that month (see Figure 1).
Accommodation and food service businesses continue to struggle, both due to policies limiting their capacity to slow the spread of the virus and the decreased demand for their services as fewer people feel comfortable with activities that allow people to congregate. Roughly 8.5% of employment in the region is at accommodation and food service establishments, but the industry accounts for double that share (16.9%) of the ongoing UI claims. Just as troubling is the high percentage of claims still being filed from workers in the industry, amounting to over 7% of all initial claims filed in May.
Manufacturing companies don't have the same operating restrictions as personal care services or food and drinking places, yet they accounted for 16.3% of all initial UI claims in May, second only to health care and social assistance. With a higher share of initial claims in May than continuing claims, manufacturers are laying off workers at higher rates than other industries have been in more recent weeks, posing a new challenge for the region's second largest employing industry.
Finally, the administrative support and waste management services industry has seen a disproportionate share of UI claims being filed by workers, similar to the accommodation and food service industry. This includes employment at personnel and staffing agencies. The large share of UI claims is likely the result of decreases in demand for labor as temporary help can be laid off easier than permanent employees. The good news is that it appears that demand for temp workers isn't gone, but has instead shifted to occupations such as cleaning rather than production. In fact, despite having roughly half the amount of job openings on MinnesotaWorks.net in the second quarter of 2020 compared to the previous year, the industry has a higher share of overall job openings in Central Minnesota. Staffing agencies are staying busy and remain on the front lines of hiring activity.
Contact Luke Greiner at 320-308-5378.