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Manufacturing Industry in Minnesota

by Derek Teed
derek.teed.state.mn.us
April 2018

Manufacturing represents an important part of the Minnesota economy. In 2016 it represented 317,411 jobs or 11.3% of total Minnesota employment. It represented $20.2bn in total wages or 13.2% of the total wages earned in Minnesota. The average wages earned in Manufacturing are 17.4% higher than the average wages earned by Minnesotans. Since Manufacturing represents a core part of the Minnesota economy, it is important to take a closer look at this industry’s recent past, its current performance, and its long-term outlook.

Minnesota Manufacturing Industry’s Past

Manufacturing in Minnesota has shown four major trends over the last 17 years:

  1. The total number of people employed in Manufacturing has been decreasing. A large majority of this decline is the result of productivity gains and automation.1 Greater Minnesota decreased by 17.2% (Chart 2), and the Twin Cities Metro Area decreased by 22.0% (Chart 1).
  2. The number of manufacturing establishments in Greater Minnesota has decreased by 10.2% (Chart 2). Twin Cities Metro Area manufacturing has decreased by 23.4% (Chart 1).
  3. The total manufacturing wages in Minnesota have been rising slowly. Total Manufacturing wages in Greater Minnesota have increased by 25.5% (Chart 2). The Twin Cities Metro Area increased by 21.3% (Chart 1).
  4. The average annual wages paid to manufacturing employees in Minnesota have been rising. Greater Minnesota has risen a total of 52.4% or 3.3% a year (Chart 2). The Twin Cities Metro Area has risen a total of 55.5% or 3.5% a year (Chart 1).

 

 Chart 1. Minnesota Urban Manufacturing, Twin Cities Metro Area


Chart 2. Minnesota Rural Manufacturing, Greater Minnesota

Manufacturing in Minnesota Now

Top Manufacturing Export Products

“Manufacturing exports totaled $18 billion with optics and medical equipment as top products and Canada and Mexico as top markets.” 2 Canada accounts for $3.80bn in exports, Mexico accounts for $2.20bn in exports, and China accounts for $2.00bn in exports from Minnesota Manufacturers. Minnesota’s top Manufacturing exports are shown in Table 1.

Table 1. Top Manufactured Exports in Minnesota

Top Manufactured Exports, 2016

Exports (billions)

Optics, Medical

$3.53

Machinery

$3.11

Electrical Machinery

$2.51

Vehicles

$1.49

Plastics

$1.13

Source: DEED, Quarterly Census of Employment and Wages, 2016

 

Top Industries based on total Minnesota GDP

“Manufacturing was the largest private sector contributor to Minnesota’s GDP (16 percent) in 2016.”3 The GDP of Minnesota’s Manufacturing industry in 2016 was $48.2 billion, shown in Chart 3 below.

Chart 3. Total GDP Industry in Minnesota

Manufacturing Industry’s Impact on other Minnesota Jobs

“In all, manufacturing accounted directly or indirectly for 1,020,500 jobs or 36% percent of all jobs in Minnesota in 2016. Each manufacturing job generates another 2.21 jobs in other segments of the economy, like jobs in sales, marketing, shipping, professional services and more.”4 The total number of jobs supported by Manufacturing are shown in Chart 4.

 Chart 4. Total Minnesota Jobs Supported by Manufacturing

 

In the JVS survey5 shown in Table 2, the manufacturing industry has more openings in Q2 2017 than in any other quarter reported since the Job Vacancy Survey started in 2001. The state of Minnesota has 11,166 manufacturing industry job openings in Q2 2017 compared to 8,122 in 2001 and 2,563 in 2009. Indeed, the short term employment outlook for the manufacturing industry in Minnesota is bright.

 

Table 2. Total Minnesota Job Vacancies in the Manufacturing Industry

2nd Quarter

4th Quarter

2017

11,166

10,105

2016

8,536

7,661

2015

7,381

7,262

2014

6,954

9,905

2013

5,363

6,560

2012

5,157

5,419

2011

5,961

4,925

2010

3,767

3,391

2009

2,563

1,970

2008

4,685

3,047

2007

7,010

5,553

2006

7,367

5,883

2005

6,477

6,792

2004

8,455

5,931

2003

4,247

5,876

2002

5,093

3,650

2001

8,122

5,732

Source: DEED, Job Vacancy Survey

 

Long Term Minnesota Manufacturing Outlook

The long term employment outlook for manufacturing jobs is mixed. Since the 2000s the total number of manufacturing jobs in the U.S. has been declining. The QCEW figures in Charts 1 and 2 above show that Minnesota has seen a modest decline in manufacturing employment since 2000. The decline in the percentage of total manufacturing employment in Minnesota has been less than in the entire U.S.

Chart 5 below shows that since 1987 real manufacturing output has increased about 70% while the total amount of employment decreased 28%. This is a result of productivity. If this trend continues, productivity and automation will decrease the total number of manufacturing jobs over the long run.

Chart 5. Historical Chart of Manufacturing Real Output (productivity) and Manufacturing Employment 

 


1 Wiseman, Paul. “Why robots, not trade, are behind so many factory job losses.” AP News. November 02, 2016. Accessed March 14, 2018. https://apnews.com/265cd8fb02fb44a69cf0eaa2063e11d9/mexico-taking-us-factory-jobs-blame-robots-instead.
2 Overview of Manufacturing. (2017, November 07). Retrieved from mn.gov/deed/business/locating-minnesota/industries-sectors/manufacturing/overview/
3 Economic Impact. (2017, August 29). Retrieved from mn.gov/deed/business/locating-minnesota/industries-sectors/manufacturing/impact/
4 Ibid.
5 Job Vacancy Survey. (n.d.). Retrieved from https://apps.deed.state.mn.us/lmi/jvs/Results.aspx. Manufacturing Industry.

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