by Amanda Rohrer
May 2014
Minnesota's 2013 job growth was fairly substantial, with an annual average increase of 48,534 (1.8 percent) over 2012. This was an improvement from the 38,868 jobs added in 2012 and was slightly better than the U.S. growth rate of 1.7 percent.
Growth was widely distributed with most industries seeing gains of between 1.4 and 2.5 percent. There were exceptions: Mining and Logging employment declined 0.5 percent. Mining and Logging is a very small industry; the annual average employment in 2013 was only 6,967 for the whole state. It also did very well in the last few years as new mining operations opened up in the Northeast part of the state. The total decline of 33 jobs may simply be the industry settling in to a new normal after abrupt growth. Nationally, the industry grew 2.3 percent, but the mix of Mining and Logging operations varies quite a bit by region.
Information employment also increased much less than other industries with a total gain of only 0.1 percent (67 jobs). Growth in the industry has been stagnant for several years now. Since this industry includes newspapers, telecommunications, software publishing and web development and search engines, the component industries may have dramatically different trends that cancel each other out in terms of overall employment impacts. The low rate of growth is consistent with the national increase of 0.3 percent.
Government employment also was nearly flat, increasing only 0.2 percent for 2013. This is in contrast with the national decline of 0.3 percent in Government employment. Last year saw a similar gain in Minnesota.
The industry that fared the best was Construction which gained 6,283 jobs (6.6 percent) compared to 3.2 percent nationally. Strong growth in this industry is promising for its impacts on other industries - new building usually is a sign of money in the economy - but as a jobs creation engine, construction jobs can be inconsistent and short term.
| Table 1: Employment Growth by Supersector, 2011 - 2013 | ||||||
|---|---|---|---|---|---|---|
| Year-to-Year Change 2012-2013 | ||||||
| Minnesota | U.S. | |||||
| Industry Title | 2013 | 2012 | 2011 | Numeric | Percent | Percent |
| Total Nonfarm | 2,779,617 | 2,731,083 | 2,688,250 | 48,534 | 1.8 | 1.7 |
| Total Private | 2,366,242 | 2,318,708 | 2,277,350 | 47,534 | 2.1 | 2.1 |
| Goods-Producing excl. Ag. | 416,258 | 407,833 | 398,800 | 8,425 | 2.1 | 1.5 |
| Service-Providing | 2,363,358 | 2,323,250 | 2,289,450 | 40,108 | 1.7 | 1.7 |
| Private Service-Providing | 1,949,983 | 1,910,875 | 1,878,550 | 39,108 | 2.0 | 2.2 |
| Mining and Logging | 6,967 | 7,000 | 6,608 | -33 | -0.5 | 2.3 |
| Construction | 101,233 | 94,950 | 91,567 | 6,283 | 6.6 | 3.2 |
| Manufacturing | 308,058 | 305,883 | 300,625 | 2,175 | 0.7 | 0.7 |
| Trade, Transportation, and Utilities | 511,475 | 503,475 | 496,883 | 8,000 | 1.6 | 1.5 |
| Retail Trade | 287,392 | 282,800 | 279,808 | 4,592 | 1.6 | 1.6 |
| Transportation and Warehousing | 93,283 | 91,950 | 91,408 | 1,333 | 1.4 | 1.8 |
| Information | 53,667 | 53,600 | 53,783 | 67 | 0.1 | 0.3 |
| Financial Activities | 181,217 | 177,908 | 174,217 | 3,309 | 1.9 | 1.2 |
| Professional and Business Services | 345,208 | 336,742 | 329,542 | 8,466 | 2.5 | 3.5 |
| Educational and
Health Service |
491,192 | 477,725 | 469,417 | 13,467 | 2.8 | 2 |
| Leisure and Hospitality | 249,675 | 245,550 | 239,558 | 4,125 | 1.7 | 3.4 |
| Other Services
(Private Only) |
117,550 | 115,875 | 115,150 | 1,675 | 1.4 | 0.6 |
| Government | 413,375 | 412,375 | 410,900 | 1,000 | 0.2 | -0.3 |
| Source: Minnesota Department of Employment and Economic Development, Current Employment Statistics | ||||||
In Figure 1 seasonally adjusted employment for the U.S. and Minnesota is displayed. Minnesota employment has largely been on a growth trajectory, except for July of 2012 when there was a decline and return to increases, then again in March and April of 2014 when employment slowed. The overall trend has mostly kept pace with the nation except for the past two months.
Over-the-year rates of growth by quarter show that growth was pretty consistent through the year (Table 2). Total Nonfarm quarterly employment over-the-year growth rates varied only 0.3 percent for the quarters of 2013. At the industry level the growth rates weren't always as resolute. The most inconsistent industries were Construction, Information, Financial Activities, Mining and Logging, and Other Services. Except for Information the inconsistency of these industries can be largely attributed to the overall seasonal pattern. Information in general has a more volatile employment pattern.
| Table 2: Minnesota Year-over-Year Growth by Quarter | ||||
|---|---|---|---|---|
| 2013 Quarterly Annual Growth Rates | ||||
| 1st QTR | 2nd QTR | 3rd QTR | 4th QTR | |
| Total Nonfarm | 1.9 | 1.6 | 1.6 | 1.7 |
| Total Private | 2.1 | 1.8 | 2.0 | 2.1 |
| Goods-Producing excl. Ag. | 1.8 | 1.2 | 1.9 | 3.2 |
| Service-Providing | 2.0 | 1.6 | 1.6 | 1.4 |
| Private Service Providing | 2.2 | 1.9 | 2.0 | 1.9 |
| Mining and Logging | 0.7 | -1.7 | -1.5 | -1.4 |
| Construction | 4.3 | 3.3 | 7.4 | 10.6 |
| Manufacturing | 1.2 | 0.6 | 0.1 | 0.9 |
| Trade, Transportation, and Utilities | 1.5 | 1.2 | 1.8 | 1.6 |
| Information | 0.2 | -0.9 | -0.7 | 1.5 |
| Financial Activities | 2.9 | 1.9 | 1.7 | 0.7 |
| Professional and Business Services | 3.2 | 2.6 | 2.3 | 1.6 |
| Educational and Health Services | 2.7 | 3.0 | 2.6 | 2.9 |
| Leisure and Hospitality | 2.0 | 1.4 | 1.6 | 1.2 |
| Other Services (Private Only) | 0.9 | 1.4 | 1.7 | 2.6 |
| Government | 0.9 | 0.3 | -0.4 | -0.7 |
| Source: Current Employment Statistics | ||||
Following several years of steady declines, the unemployment rate is now holding roughly steady just below 5.0 percent - 4.7 percent seasonally adjusted in April. Although Minnesota's unemployment rate has been consistently better than the U.S. rate, the gap is beginning to close as Minnesota seems to reach normal and the nation as a whole continues to work toward that end.
Initial claims are falling, too. Last January seasonally adjusted initial claims bottomed out at 19,219, below the pre-recession low of 21,727 in December 2007. Except for a spike during the state government shutdown in 2011, seasonally adjusted initial claims have been falling reliably but not very evenly since September 2009. This marks a return to relatively normal levels.
In the top 25 growth industries below the supersector level, seven industries were in the construction industry and five were related to construction and building maintenance. Given that construction was the largest growth industry by multiple measures, this is not surprising. It speaks to pent-up demand for housing and to building improvements that are finally being tapped as other parts of the economy recover.
Other growth industries are high-skilled service industries. Insurance Carriers, Architectural, Engineering, and Related Services, Accounting, Tax Preparation, Bookkeeping and Payroll, Professional, Scientific, and Technical, and Schools are all industries that deal in information and very specific services. The kinds of jobs being created are likely higher-skilled and may be pulling from the pool of newly minted college graduates or people who had left the labor force rather than take a job below their skill level. In either case, the unemployment rate would remain unaffected since new entrants and non-participants are not counted among the unemployed.
Minnesota's employment in 2013 returned to pre-recession normal. Although growth has been measured, and workers are still picking up the pieces after a tough few years, our measures of economic progress have evened out and are ready to tell a new story.
| Table 3: Minnesota Industries with the Highest Rates of Growth | ||
|---|---|---|
| Industry Title | 2012-2013 Growth | |
| Numeric | Percent | |
| Residential Building Construction | 822 | 8.7 |
| Nondepository Credit Intermediation | 707 | 8.5 |
| Transportation Equipment Manufacturing | 716 | 6.9 |
| Construction of Buildings | 1,450 | 6.7 |
| Specialty Trade Contractors | 3,956 | 6.6 |
| Construction | 6,216 | 6.5 |
| Heavy and Civil Engineering Construction | 810 | 5.9 |
| Services to Buildings and Dwellings | 1,379 | 5.2 |
| Building Equipment Contractors | 1,245 | 4.5 |
| Insurance Carriers | 2,086 | 4.5 |
| Architectural, Engineering, and Related Services | 746 | 4.1 |
| Accounting, Tax Preparation, Bookkeeping, and Payroll Services | 573 | 3.9 |
| Computer Systems Design and Related Services | 1,194 | 3.9 |
| Social Assistance | 2,920 | 3.8 |
| Ambulatory Health Care Services | 4,773 | 3.6 |
| Building Material and Garden Equipment and Supplies Dealers | 872 | 3.5 |
| Elementary and Secondary Schools | 686 | 3.5 |
| Foundation, Structure, and Building Exterior Contractors | 383 | 3.4 |
| Credit Intermediation and Related Activities | 1,791 | 3.4 |
| Offices of Physicians | 2,153 | 3.4 |
| Insurance Carriers and Related Activities | 2,153 | 3.3 |
| Professional, Scientific, and Technical Services | 4,369 | 3.3 |
| Motor Vehicle and Parts Dealers | 979 | 3.2 |
| Health Care and Social Assistance | 12,277 | 3.0 |
| State Government excluding Education | 1,088 | 3.0 |
| Source: Current Employment Statistics | ||
