by Luke Greiner
May 2014
Manufacturing plays a large role in the economy of Central Minnesota. Even though the industry was surpassed by health care in terms of employment, manufacturing stands as the second largest industry. As recently as 2007 manufacturing was king in Central Minnesota and much of its regional dominance is still visible. Many of the manufacturers that were the backbone of the economy still exist and thrive today. Manufacturing is still the largest industry in Benton, McLeod, and Meeker counties.
Manufacturing is significant in Central Minnesota not only because of the sheer number of jobs in the industry but also because the wages paid in the manufacturing industry are considerably higher than the average wage for all industries. The average hourly wage for all industries in Central Minnesota is $17.60 per hour, totaling $36,608 annually. Manufacturing occupations pays on average $21.68 per hour, averaging an annual salary of $45,084. This means that the manufacturing sector pay is about 24 percent higher than the average for all industries.
This article will look at side-by-side comparisons of the manufacturing industry in each of the 13 counties that make up the Central Planning Area. Third quarter data will be used for all comparisons unless otherwise noted to maintain consistency and because it is the most recent quarter data available.
Each county of the Central Planning Area has a unique manufacturing sector that contributes greatly to the successes and struggles coming out of the recession. In most counties a very clear sector of manufacturing defines the goods they produce. A diverse manufacturing sector can bolster the economy by allowing strategic partnerships to complement other producers and help source parts locally. The mix also allows for important diversification that can allow an economy to sustain itself during volatile market fluctuations.
Figure 1 illustrates the relative share of employment among the 13 counties. McLeod County easily has the highest percentage of workers dedicated to manufacturing. All but Pine and Mille Lacs have a higher percentage of manufacturing employment than Minnesota's 11.5 percent.
Manufacturing in Benton County employs 3,818 workers, 22.4 percent of all jobs in the county. The majority of these jobs are in the Food Manufacturing industry that employs 646 workers. Miscellaneous Manufacturing, largely medical equipment and supplies, is also worth mentioning because that industry has increased rapidly since 2009. If historical growth continues it will outpace the Food Manufacturing industry by next year. While the Manufacturing industry is still lagging in growth, areas such as Miscellaneous Manufacturing have excelled.
2,262 (16 percent) of all jobs in Chisago County are in the Manufacturing industry. More than 24 percent of Manufacturing jobs are in Plastics and Rubber Products Manufacturing. Manufacturing has fared well in Chisago and substantially outpaced the growth for all industries. Manufacturing in the county has also gained a larger share of employment since the end of the recession with a 3.7 percent increase.
1,537 jobs (14.5 percent) in Isanti County's workforce are in the Manufacturing industry. The largest sector is Fabricated Metal Product Manufacturing, employing more than a third of those in Manufacturing. The share of Manufacturing jobs increased since 2009 when 10.9 percent of jobs were in Manufacturing. The Fabricated Metals sector also gained a larger share of Manufacturing employees since 2009. Even though the growth for Fabricated Metals was a healthy amount since 2009, Manufacturing as a whole did extremely well, growing 38 percent.
Kanabec County's workforce has 519 jobs (13.8 percent) in the Manufacturing sector. While the largest portions of them are employed in the Fabricated Metals Products industry, they represent less than 20 percent of all Manufacturing employees. This county has had negligible growth in general since the end of the recession. Manufacturing, however, has boomed, growing over 61 percent.
3,309 (14.5 percent) of Kandiyohi jobs were in Manufacturing in 2013. It should be no surprise that Food Manufacturing is the largest sector by a large margin. Fully 61.4 percent of manufacturing employees are engaged in the Food sector. While the share of Manufacturing employment has increased about 1 percent, the share of those in Food Manufacturing has decreased about 3.5 percent. Manufacturing growth surpassed the growth of all industries combined by about 8 percent since 2009.
5,769 (33.1 percent) of all McLeod County jobs were in manufacturing. This has ticked up slightly from 2009 when 32.5 percent were employed in the industry. Food Manufacturing is the largest sub-sector with 22.7 percent of Manufacturing employees. The food plants have seen a healthy 38.1 percent gain since 2009, while the entire Manufacturing industry experienced a more modest 7.6 percent.
1,344 (19.6 percent) of the county's workforce is employed in Manufacturing with the largest portion in Machinery Manufacturing, roughly 27 percent. The third quarter of 2013 fluctuated significantly in Machinery Manufacturing, resulting in decrease in employment and share among Manufacturing sectors. Closer examination of the first and second quarters of 2013 also shows similar figures, indicating the third-quarter loss is not isolated.
With 848 (8.9 percent) jobs in Manufacturing, Mille Lacs County has experienced large gains in the sector since the recession. Manufacturing in this county has outpaced the average growth by nearly 30 percent. The largest industry, Furniture and Related Product Manufacturing, gained an astonishing 172 percent. Much of that gain is attributed to regaining employees from a drop in employment that started in the third quarter of 2009. The previous two quarters of 2009 averaged 133 employees. If we were to start at the previous two quarters instead, we would see a more nearly normal growth of 55 percent.
With 249 (3 percent) covered jobs provided by manufacturers, this county has the lowest share of Manufacturing employment in the central area. The employment is highly concentrated in Fabricated Metal production with 62.7 percent of all Manufacturing jobs in the sector. Average growth across all industries has been stagnant while Manufacturing grew at a respectable 13.2 percent.
836 jobs in Renville County are in the Manufacturing sector. Although Food Manufacturing is the largest industry in the subsector with 45 percent of all the jobs, the share of employment for all Manufacturing as well as Food Manufacturing has decreased since 2009.
3,262 (13 percent) of Sherburne County's workforce is employed by the Manufacturing industry. Fabricated Metal Products is the largest sector of Manufacturing, and 32.1 percent of Manufacturing employees work in the industry. Manufacturing has outpaced the growth of all industries, but the Fabricated Metals Product industry has experienced a much less robust growth period.
The largest economy in the central region is much more diverse, with a modest 14.1 percent of all jobs in Manufacturing (11,524). The largest subsector is Food Manufacturing with almost one of every five Manufacturing jobs. The entire Manufacturing industry is very diverse with many subsectors employing similar amounts. The second largest, Fabricated Metals Products, employs more than 1,700, and the next three largest all employ more than 1,100. Only one, Printing and Related Support activity, has experienced negative growth since 2009.
Wright County's labor force has 13.7 percent (5,202) in the Manufacturing business. Fabricated Metal Production is the largest area with 23.9 percent of Manufacturing jobs in the subsector. The share of Manufacturing employment has increased slightly since 2009, from 11.1 percent to 13.7 percent. Growth in this county has been exceptional for Manufacturing with a gain of 33.6 percent since 2009.
Table 1: Manufacturing Employment in Central Minnesota Planning Area| County | Industry | Percent Change 2009-2013 | 2013 Qtr. 3 | 2012 Qtr. 3 | 2011 Qtr. 3 | 2010 Qtr. 3 | 2009 Qtr. 3 |
|---|---|---|---|---|---|---|---|
| Benton | Total, All Industries | 4.7% | 17,068 | 16,391 | 16,224 | 16,152 | 16,308 |
| Manufacturing | -14.2% | 3,818 | 3,871 | 4,107 | 4,112 | 4,449 | |
| Food Manufacturing | -8.0% | 646 | 626 | 651 | 712 | 702 | |
| Miscellaneous Manufacturing | 41.0% | 602 | 657 | 517 | 486 | 427 | |
| Chisago | Total, All Industries | 3.7% | 14,171 | 14,022 | 13,802 | 13,679 | 13,663 |
| Manufacturing | 34.2% | 2,262 | 2,191 | 1,985 | 1,872 | 1,686 | |
| Plastics and Rubber Products Manufacturing | 16.9% | 554 | 560 | 535 | 517 | 474 | |
| Isanti | Total, All Industries | 3.9% | 10,610 | 10,141 | 10,190 | 10,065 | 10,211 |
| Manufacturing | 38.0% | 1,537 | 1,455 | 1,238 | 1,155 | 1,114 | |
| Fabricated Metal Product Manufacturing | 19.1% | 529 | 536 | 495 | 451 | 444 | |
| Kanabec | Total, All Industries | 2.9% | 3,768 | 3,744 | 3,677 | 3,671 | 3,663 |
| Manufacturing | 61.7% | 519 | 499 | 378 | 345 | 321 | |
| Fabricated Metal Product Manufacturing | -2.8% | 103 | 119 | 111 | 90 | 106 | |
| Kandiyohi | Total, All Industries | 2.5% | 22,891 | 22,801 | 22,755 | 22,369 | 22,326 |
| Manufacturing | 10.6% | 3,309 | 3,217 | 3,151 | 2,998 | 2,992 | |
| Food Manufacturing | 4.7% | 2,033 | 1,973 | 1,957 | 1,888 | 1,941 | |
| McLeod | Total, All Industries | 5.6% | 17,418 | 16,875 | 17,163 | 16,613 | 16,488 |
| Manufacturing | 7.6% | 5,769 | 5,304 | 5,426 | 5,466 | 5,363 | |
| Food Manufacturing | 38.1% | 1,308 | 1,045 | 957 | 966 | 947 | |
| Meeker | Total, All Industries | 4.5% | 6,847 | 6,652 | 6,646 | 6,480 | 6,552 |
| Manufacturing | 12.8% | 1,344 | 1,300 | 1,355 | 1,286 | 1,192 | |
| Machinery Manufacturing | -3.4% | 369 | 429 | 415 | 415 | 382 | |
| Mille Lacs | Total, All Industries | 5.5% | 9,477 | 9,465 | 9,146 | 8,783 | 8,979 |
| Manufacturing | 33.5% | 848 | 705 | 601 | 576 | 635 | |
| Furniture and Related Product Manufacturing | 172.4% | 207 | 166 | 39 | 28 | 76 | |
| Pine | Total, All Industries | 0.4% | 8,225 | 8,162 | 8,182 | 8,261 | 8,191 |
| Manufacturing | 13.2% | 249 | 215 | 197 | 189 | 220 | |
| Fabricated Metal Product Manufacturing | 25.8% | 156 | 150 | 158 | 154 | 124 | |
| Renville | Total, All Industries | 0.2% | 5,704 | 5,683 | 5,522 | 5,726 | 5,692 |
| Manufacturing | -2.1% | 836 | 928 | 920 | 921 | 854 | |
| Food Manufacturing | -10.0% | 376 | 469 | 450 | 401 | 418 | |
| Sherburne | Total, All Industries | 12.7% | 25,103 | 23,140 | 22,799 | 22,327 | 22,268 |
| Manufacturing | 15.1% | 3,262 | 3,014 | 2,938 | 2,926 | 2,833 | |
| Fabricated Metal Product Manufacturing | 6.6% | 1,048 | 993 | 1,011 | 1,080 | 983 | |
| Stearns | Total, All Industries | 5.7% | 81,626 | 81,456 | 79,302 | 77,603 | 77,213 |
| Manufacturing | 5.2% | 11,524 | 11,643 | 11,260 | 10,755 | 10,954 | |
| Food Manufacturing | 0.4% | 2,216 | 2,130 | 2,143 | 2,170 | 2,207 | |
| Printing and Related Support Activities | -29.3% | 1,076 | 1,199 | 1,375 | 1,355 | 1,522 | |
| Nonmetallic Mineral Product Manufacturing | 9.4% | 1,163 | 1,071 | 1,059 | 1,023 | 1,063 | |
| Fabricated Metal Product Manufacturing | 19.8% | 1,677 | 1,882 | 1,681 | 1,449 | 1,400 | |
| Transportation Equipment Manufacturing | 31.7% | 1,453 | 1,472 | 1,298 | 1,157 | 1,103 | |
| Wright | Total, All Industries | 8.3% | 37,890 | 37,295 | 36,200 | 35,460 | 34,988 |
| Manufacturing | 33.6% | 5,202 | 5,037 | 4,409 | 4,183 | 3,895 | |
| Fabricated Metal Product Manufacturing | 22.2% | 1,245 | 1,226 | 1,164 | 1,076 | 1,019 | |
The future of Manufacturing is far from its demise often discussed in the media. Although the projected growth is 6.7 percent less than the projected growth for all industries, it is still projected to grow. Table 2 highlights the growth of Manufacturing in Central Minnesota's future. Leading future net gains of more than 1,400 jobs, Fabricated Metal Product Manufacturing is substantial and will create many opportunities for the workers who have the required skillset. With a projected net gain of more than 4,000 jobs, the central region will grow faster than Manufacturing across the entire state by 6.7 percent. The Northwest is the only region with a higher projected growth at 16.6 percent.
| Table 2: Central Minnesota Employment Projections | ||||
|---|---|---|---|---|
| Industry | 2010 | 2020 | 2010-2020 Percent Change | 2010-2020 Numeric Change |
| Manufacturing | 35,603 | 39,725 | 11.6% | 4,122 |
| Food Manufacturing | 7,208 | 7,640 | 6.0% | 432 |
| Printing and Related Support Activities | 1,987 | 2,060 | 3.7% | 73 |
| Chemical Manufacturing | 270 | 302 | 11.9% | 32 |
| Plastics and Rubber Products Manufacturing | 2,293 | 2,790 | 21.7% | 497 |
| Nonmetallic Mineral Product Manufacturing | 1,931 | 2,306 | 19.4% | 375 |
| Fabricated Metal Product Manufacturing | 5,842 | 7,258 | 24.2% | 1,416 |
| Machinery Manufacturing | 2,732 | 3,127 | 14.5% | 395 |
| Transportation Equipment Manufacturing | 1,884 | 2,221 | 17.9% | 337 |
| Furniture and Related Product Manufacturing | 1,875 | 2,270 | 21.1% | 395 |
| Miscellaneous Manufacturing | 1,289 | 1,380 | 7.1% | 91 |
| Source: DEED. 2010-2020 Employment Projections | ||||
Rising labor costs in Asian countries, particularly China, coupled with problematic logistics and unexpected changes in government policies should deter mass relocations of manufacturers. This will also nurture a more competitive environment for manufacturers located in Central Minnesota.
Tightening labor markets will be a significant factor for expansions and sustainable manufacturing density in the region moving forward. As technology molds the way goods are produced, it will also affect the training programs required to supply an adequate labor pool. Education programs, on-the-job training, and apprenticeships are a major driving force that can either restrict or promote expansion of manufacturing in the area. Those being trained today will need specialized skills to produce the goods of tomorrow.
