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Industrial Analysis

by Nick Dobbins
nicholas.dobbins@state.mn.us
June 2017

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

Overview

Minnesota lost 7,200 jobs (0.2 percent) in May on a seasonally adjusted basis. The decline was not entirely unexpected, as April had added 16,400 jobs (revised up from a preliminary estimate of 15,100), which was the largest single-month increase since 2011. 2016 estimates displayed a similar pattern, with a spike in employment in April followed by a downward correction in May. Estimates may be adjusting to a slight change in our spring seasonal employment patterns in recent years. Annually the state added 48,068 jobs (1.7 percent). This represents an improvement from April estimates when over-the-year growth slipped to 1.2 percent. The last time the annual growth rate rose above 1.7 percent was in April of 2015 when it hit 1.9 percent. Annual growth has been fairly stable in recent years, generally hovering between 1 and 2 percent since late 2011, save for a handful of months that fell slightly outside that range.

Mining and Logging

Mining and Logging added 100 jobs (1.4 percent) in May. That returns the supersector to 7,000 total seasonally adjusted jobs after April’s decline, and matches the highest employment level they have seen since June of 2015. Over the year Mining and Logging added 552 jobs (8.7 percent). This marks a decline from April’s 14.3 percent, reflecting the fact that the worst losses in the industry happened over 12 months ago. Barring additional turmoil in the supersector, this trend should continue, and over-the-year growth rates will likely settle in at a more conservative level by late in the year.

Construction

Employment in the Construction industry was down by 2,600 (2.1 percent) in May. This decline likely represents a correction from the previous month’s growth as April saw a 2.5 percent employment increase. Annually the supersector added 4,375 jobs (3.6 percent). Most of that growth came from Specialty Trade Contractors which added 4,609 jobs (6 percent), while Heavy and Civil Engineering added 510 jobs (2.8 percent). Construction of Buildings continues to struggle on an annual basis, losing 744 jobs (2.9 percent), marking 12 straight months of over-the-year declines, although losses seem to have stabilized of late.

Manufacturing

Manufacturers in Minnesota added 800 jobs (0.3 percent) in May. The supersector has added jobs in each of the previous four months and has seen net growth of 2,000 jobs so far in 2017. Non-Durable Goods Manufacturing grew by 1,400 (1.2 percent). Durable Goods Manufacturers lost 600 jobs (0.3 percent) following three straight months of growth. Annually the supersector added 2,776 jobs (0.9 percent). Durable Goods manufacturers lost 880 jobs (0.4 percent), while Non-Durable Goods Manufacturers added 3,656 (3.2 percent).

Trade, Transportation, and Utilities

Trade, Transportation, and Utilities employment was off by 1,900 (0.4 percent). That marked three consecutive months with losses of over 1,500 jobs for the supersector, all but completely erasing the February gain of 5,700 jobs. May’s losses came entirely through Retail Trade, which shed 2,600 jobs (0.9 percent). Wholesale Trade added 600 jobs (0.5 percent), and Transportation, Warehousing, and Utilities added 100 (0.1 percent). Annually the supersector added 2,246 jobs (0.4 percent). The annual component sector movement is almost the mirror image of the monthly change, with the growth being led by Retail Trade (up 1,861 jobs or 0.6 percent), as Transportation, Warehousing, and Utilities chipped in 349 (up 0.3 percent), and Wholesale Trade employment growth was flat.

Information

Information employment was off by 400 (0.8 percent) in May. The loss comes on the heels of two consecutive months of growth for the struggling supersector and brings the seasonally adjusted growth back to zero for 2017. Annually, Information employment was up by 741 (1.5 percent). However, both published component sectors, Telecommunications and Publishing Industries, continue to show over-the-year jobs losses, as they have consistently since 2013.

Financial Activities

The Financial Activities supersector lost 500 jobs (0.3 percent) in May. All of that loss came in Real Estate and Rental and Leasing (down 1.5 percent) as Finance and Insurance employment was flat. Annually the supersector added 1,700 jobs (1 percent), although the relative stability belied continuing significant changes in component sectors. Finance and Insurance added 3,845 jobs (2.7 percent) and has not seen a month with over-the-year losses since 2014. Real Estate and Rental and Leasing, on the other hand, has lost 2,145 jobs (6.2 percent) since May of 2016.

Professional and Business Services

Professional and Business Services shed 2,100 jobs (0.6 percent) in May, although this loss follows growth of 4,500 and 4,600 jobs respectively in March and April, as alternating gains and losses continue in the supersector. Annually the supersector added 6,200 jobs (1.7 percent). Management of Companies and Enterprises was up by 2,330 (3 percent), and Administrative and Support and Waste Management and Remediation Services added 4,672 (3.4 percent), making up for the slight losses in Professional, Scientific, and Technical Services.

Educational and Health Services

Educational and Health Services employment was static in May, losing 100 jobs (0.0 percent). Health Care and Social Assistance lost 1,200 jobs (0.3 percent) while Educational Services added 1,100 (1.6 percent). Over the year the supersector’s employment was up by 20,225 (3.9 percent). Health Care and Social Assistance added 13,757 (3 percent), and Educational Services added 6,468 (9.3 percent).

Leisure and Hospitality

Leisure and Hospitality employment was flat in May, as the small loss of 300 (0.1 percent) in Accommodation and Food Services was offset by an equal gain in Arts, Entertainment, and Recreation (up 0.7 percent). Annually the supersector added 1, 420 jobs (0.5 percent). Arts, Entertainment, and Recreation drove most of that gain, adding 1,222 jobs (2.7 percent). Prior to May’s estimates, over-the-year growth in the supersector had been negative or flat since September of 2016.

Other Services

Employment in the Other Services supersector was up 2,100 (1.8 percent) in May. Annually the supersector added 4,992 jobs (4.3 percent). This was the second fastest over-the-year growth of any supersector in the state after Mining and Logging.

Government

Government employment was off by 2,600 (0.6 percent) in May. The largest loss came in Local Government, which shed 2,300. The similarly-sized gain in April suggests that this movement in Local Government is likely caused by some variation in the normal seasonal employment patterns. Annually, Government employers added 2,841 jobs (0.7 percent). State Government shed 1,579 jobs (1.6 percent).


Seasonally Adjusted Nonfarm Employment (in thousands)
Industry May-17 Apr-17 Mar-17
Total Nonfarm 2,938.5 2,945.7 2,929.3
Goods-Producing 448.5 450.2 446.7
Mining and Logging 7.0 6.9 7.0
Construction 121.6 124.2 121.2
Manufacturing 319.9 319.1 318.5
Service-Providing 2,490.0 2,495.5 2,482.6
Trade, Transportation, and Utilities 534.8 536.7 538.6
Information 50.9 51.3 51.2
Financial Activities 177.1 177.6 178.0
Professional and Business Services 376.7 378.8 374.2
Educational and Health 539.4 539.5 534.5
Leisure and Hospitality 265.6 265.6 264.2
Other Services 120.5 118.4 117.3
Government 425.0 427.6 424.6
Source: Department of Employment and Economic Development, Current Employment Statistics, 2017.



bar graph- Minnesota Employment Growth

*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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