Manufacturing business picks up but how about jobs?

Posted at 6:00 PM on January 3, 2011 by Paul Tosto (1 Comments)
Filed under: Jobs & unemployment

Manufacturing is a crucial part of Minnesota's economy, historically one of the main engines of job growth. But we're seeing a split in this recovery between business growth and job creation.

The latest indicator came Monday when Creighton University posted its latest Minnesota index, noting, "Even with healthy economic growth for 2011, the state will not recover the manufacturing jobs lost since the recession began."

That jibes with results from a recent state survey showing 54 percent of manufacturers expecting growth in their business in 2011 compared to 2010, but only 36 percent planning to add jobs and nine percent of those responding expecting to cut jobs this year.

Really, it takes a chart to show how hard Minnesota manufacturing has fallen in the recession and how relatively mild the rebound has been.

Here's a chart showing employment in Minnesota manufacturing since 1990 (click on the chart for a larger view).
The data comes from the federal Bureau of Labor Statistics.

The slide the past few years is pretty stunning.

Nearly 40,000 fewer employed in Minnesota manufacturing now compared to December 2007, when the recession officially began. The sector's only added a net 4,000 jobs since June 2009, when the recession officially ended.

A bounce back in manufacturing jobs is crucial to Minnesota. In 2009, the sector was responsible for 14 percent of all the state's employment.

Just a few weeks ago, state officials were highlighting manufacturing as a bright spot with 12,900 jobs added in the past 12 months.

But the reality is 339,000 Minnesotans were working in manufacturing in December 2007. As of November, only 302,000 were employed. It's a long climb back from three years ago.

And we may never get back to 2000, when Minnesota manufacturing employed nearly 400,000.
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What are you seeing in manufacturing? Post below or contact us directly at MinnEcon.

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Comments (1)

To make this a more meaningful analysis, perhaps a couple of other factors needs to be superimposed with the current chart:

1) How does Minnesota compare to the national trend? Neighboring states?

2) When adjusted for inflation, what is the change in aggregate value of manufactured goods sold? (Again, a national and/or regional comparison would provide a better assessment of Minnesota's change.)

What role has technology played in affecting production and/or manufacturing employment? Most would agree that many industries are less labor-intensive compared to yesteryear and/or some entry-level assembly jobs have shifted to other states or out of the U.S. altogether. What impact has that had and (perhaps more importantly) will it affect manufacturing employment numbers in the recovery?

How has Minnesota fared when the number of persons employed in manufacturing as a percentage of the total nonfarm employment?

Just some thoughts....

Posted by John O. | January 4, 2011 6:58 AM

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