The presence of such industry powerhouses as Polaris, Arctic Cat and New Flyer make Northwest Minnesota a hub of transportation equipment manufacturing.
From wheat and potatoes to soybeans and sugar beets, the region is a major producer and processor of food staples and specialty agricultural products.
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9/22/2022 9:00:00 AM
Anthony Schaffhauser
Manufacturing provides 14.2% of all jobs in the Northwest Minnesota region and with higher average wages, accounts for 18.3% of total wages as of the first quarter of 2022. Much like other regions, Manufacturing is the second largest employing industry in the Northwest, behind Health Care & Social Assistance, but this is a significantly larger share than statewide Manufacturing employment and payroll concentrations at 11.5% and 12.3%, respectively.
Based on the regional strength, Manufacturing in Northwest Minnesota was not nearly as affected by the pandemic as services-providing industries (see Figure 1). As of first quarter 2022, Manufacturing employment was actually at a new record high level, nudging 0.3% above the prior high in 2019. In contrast, total employment across all industries remains 4% below its first quarter 2020 peak, prior to the pandemic recession.
Manufacturing led employment declines going into the pandemic, but declined only 2.9% from first quarter 2019 to 2021, compared to a 5% loss for all industries. Manufacturing is now also leading the recovery, gaining 3.3% from first quarter 2021 to 2022, compared to 1.1% growth across all industries.
Even prior to the pandemic, Manufacturing employment had outpaced growth in other industries in the region, increasing 12.6% from first quarter 2012 to 2019 versus 7.2% growth for all industries. So, while it is no surprise that the manufacture and purchase of goods were less affected by the pandemic than services, this is also a continuation for Manufacturing employment growth after the Great Recession.
Evolving from the Northwest's agricultural and natural resources roots, the top five Manufacturing subsectors in Northwest Minnesota are Food, Fabricated Metal Products, Machinery, Transportation Equipment, and Wood Product Manufacturing. Combined, these five subsectors make up nearly three-quarters (73.8%) of the region's Manufacturing employment. Figure 2 displays employment in all of Northwest's Manufacturing subsectors over the past decade from the first quarter 2012 to 2022, sorted from largest to smallest.
While still substantial, employment in Wood Product and Transportation Equipment Manufacturing was essentially flat, while Machinery Manufacturing added the most jobs, increasing by over 1,000 jobs. Likewise, Food Manufacturing added 591 jobs, growing 10.8%. The subsector that added the third most jobs, Fabricated Metal Product Manufacturing, gained 328 jobs, expanding 8.5%.
Overall, most of the Manufacturing subsectors saw growth. Beverage Manufacturing employment had the fastest growth, increasing nearly eight-fold. Electrical Equipment, Appliance & Component Manufacturing employment tripled, making it the second fastest growing, followed by Chemical Manufacturing with 89.5% growth. Miscellaneous Manufacturing ranked fourth fastest with 55.1% growth, adding 310 jobs, which was also fourth in terms of number of jobs added. Finally, Plastics & Rubber Products Manufacturing was fifth both in number of jobs gained (294) and rate of growth (39.6%).
Over the past decade, Manufacturing has been growing in the Northwest. The largest Manufacturing subsectors have maintained or grown employment, and some of the smaller subsectors have experienced substantial growth. Even more than the state, the region depends on the strength of the Manufacturing sector to provide jobs, high wages, and economic stability.
For more information about Northwest Minnesota, contact Labor Market Analyst Anthony Schaffhauser at 320-441-6594.
Contact Anthony Schaffhauser at 320-441-6594.
