Industrial Analysis

by Jerry Brown - jerry.brown@state.mn.us
January 2010

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

Overview

Employment estimates for December 2009 showed the state losing jobs for the 10th time in 2009. The loss of 4,100 reflected losses to six of 11 supersectors. Trade, transportation, and utilities showed the largest decline, down 3,800 for the month. Leisure and hospitality, construction, and financial activities all showed losses between 1,300 and 1,700. There were two monthly increases of note. The largest increase was in professional and business services with the addition of 3,900 jobs. Manufacturing saw an increase of 1,000 jobs. On an annual basis estimates showed a decline of 80,800, equal to 3 percent. The most dramatic losses were in manufacturing, which fell by over 33,000, with all supersectors except educational and health services showing a loss compared to last December. Manufacturing employment has showed a slight improvement the past few months, and the annual decline now stands at 10.2 percent, down from 11.9 percent in October. This is still much worse than the 6.3 percent loss posted last January. Trade, transportation, and utilities posted the second largest decline, down 17,700 for the year. While improved by three strong months, professional and business services still showed an annual decline of 8,700. Likewise, construction showed a loss of 7,800, much improved from earlier in 2009 but still substantial.

Mining and Logging

Mining and logging added an estimated 100 jobs in December. The supersector has added back about 1,100 of the 2,100 jobs shed from January to July 2009. The annual loss stood at 1,000 for the month.

Construction

After four months of little change to construction employment, the supersector showed a loss of 1,700 in December. It was a poor month for specialty trade contractors, which experienced most of the losses posted for the supersector. Over the last year the construction supersector lost 8.2 percent of employment, equal to approximately 7,600 jobs. Residential building construction continued to lag substantially with a loss of 18.8 percent. For the first 11 months of 2009 permits for new housing units fell by 15.6 percent compared to the same period in 2008. Specialty trade contractors similarly lost 8.6 percent compared to last year reflecting not only the weakness in housing but a lack of activity in commercial construction as well. Heavy and civil engineering construction was up 800 jobs on the strength of publicly funded projects and pipeline construction.

Manufacturing

Manufacturing employment was up 1,000 in December. All of the increase came in durable-goods manufacturing, which added 1,100 jobs and posted only the second measurable increase in the past two years. Over the past six months the supersector has increased four times against two declines. Unfortunately the losses were more substantial yielding a net loss of 1,500 in the second half of the year. Compared to December 2008 the supersector is down nearly 33,100 jobs. Over 29,000 of this decline was in durable-goods manufacturing, where every estimated industry grouping showed an annual loss. The largest losses were in computer and electronic product manufacturing, down 6,200; fabricated metal manufacturing, down 5,600; and machinery manufacturing, off 4,000 jobs. Nondurable-goods manufacturing was down nearly 3,900, mainly from losses in paper manufacturing and printing and related.

Trade, Transportation, and Utilities (TTU)

Since June trade, transportation, and utilities employment has declined four times yielding a net loss of 8,600 on a seasonally adjusted basis. In December the supersector was down 3,800 jobs, with losses in retail trade and in transportation, warehousing, and utilities outweighing an increase in wholesale trade. Retail trade alone was estimated to have shed approximately 3,600 jobs. Transportation, warehousing, and utilities fell by 1,500, the fifth loss for this industry grouping in the past six months during which time employment is down 4,000. Partly balancing these losses has been growth in wholesale trade employment, up 1,300 for the month and 2,700 over the past six months. On an annual basis the supersector showed a decline of 17,700. Of this, nearly 9,700 jobs were estimated to be lost in transportation, warehousing, and utilities representing a -10.3 percent change from a year ago. Wholesale trade employment was down nearly 3,300, mainly caused by durable-goods wholesaling. Retail trade posted an annual loss of 4,800 with large declines in most estimated component industries particularly motor vehicle and parts dealers and food and beverage stores.

Information

Information increased 300 jobs for the month following a sizeable decline in November (revised). There has been little net change in employment over the last six months. This is a substantial change from the relatively large monthly declines that occurred in the first half of 2009. The declines that occurred in the first half of the year are reflected in an annual loss of 2,500 present in December. Of this, about 1,100 came in traditional publishing industries.

Financial Activities

It was generally a weak month in financial activities as all of the components showed poor results delivering a job loss of 1,700 in December. This was the first loss since August and the largest experienced since April. Over the last year supersector employment fell 1,800. About 1,000 of this came in finance and insurance and 800 in real estate and rental and leasing. Securities and commodities companies showed the largest losses, and insurance companies still showed a small over-the-year increase.

Professional and Business Services (PBS)

A large gain in administrative and support and waste management led to a gain of 3,900 for the professional and business services supersector. There were gains of 400 and 200 in professional and technical services and in management of companies, but the bulk of the increase was in administrative and support and waste management services. The supersector still showed a loss on an annual basis, down 8,700 since December 2008. Professional, scientific, and technical services lost 7,700 jobs on an annual basis. Management of companies also showed a large decline. These losses were partly offset by increases in administrative and support and waste management. The improvement in administrative and support and waste management in recent months has moved annual growth from sharply negative last summer to showing annual growth in December for the first time in more than two years.

Educational and Health Services

Educational and health services posted a second consecutive monthly loss in December down 900 jobs from November. All of the monthly loss came in private educational services, down 1,100 jobs, with most of the decline in colleges where cuts associated with the holiday break were larger than normal. On an annual basis the supersector showed a gain of 4,800. All of the growth came in health care and social assistance, which increased by more than 6,600 jobs despite a loss of 1,300 in hospitals, one of its four main component industries. Nursing and residential care was up 3,200, followed by increases of 2,600 and 2,100 in social assistance and ambulatory health care, respectively.

Leisure and Hospitality

Employment in leisure and hospitality industries was down 1,300 representing a second consecutive month of substantial job loss and the fourth decline in the last six months. As is usually the case the determinative factor was a change in accommodation and food services, in this case a loss of 1,900. Full-service restaurants showed a particularly weak month, producing most of the reductions in accommodation and food services. A fairly sharp increase in winter recreation, including skiing facilities, produced a seasonally adjusted gain of 600 in arts, entertainment, and recreation, but this increase was easily erased by the large fall in accommodation and food services.

Other Services

Other services lost an estimated 300 jobs for the month. Personal and laundry services; and religious, grantmaking, civic, professional, and related industries groupings showed slightly weaker results. Compared to December 2008 the supersector showed 4,000 fewer jobs with job losses posted in each major component industry grouping. The largest decline was in personal and laundry services, down 1,600 for the year.

Government

There was a small increase in government employment over the past month with 300 additional jobs estimated, caused by a seasonally adjusted increase in local government employment. Over the past year government employment fell 1 percent. State government employment fell by 2,000 with the loss coming from educational services. Local government employment also fell by 2,000 jobs, with nearly all of these losses also coming from local government education.

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