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Minnesota gains jobs in March, though construction slips

Minnesota employers added 7,800 jobs in March, ratcheting up year-over-year gains to 50,829, according to seasonally adjusted data released Thursday by Minnesota’s Department of Employment and Economic Development. That’s a 1.9 percent increase from a year earlier.

The construction sector was the only one to post a year-over-year net loss in jobs — albeit a modest one, at 25.

Month-over-month, Minnesota lost 800 construction jobs in March, dampening hopes for stronger growth after a sluggish stretch for the sector.

“The one thing that’s a bit telling about construction numbers is that much of the weakness here is in the specialty trades and the residential construction components,” said Steve Hine, research director of DEED’s Labor Market Information Office. “Those, a year ago, were two areas that were some of the stronger areas.”

But now those markets are showing signs of a plateau, Hine said, noting that neither is declining, but both are seeing a slower growth trajectory. He said last month that March’s jobs report could be a telling one for the construction industry.

A strong economic outlook hasn’t fully countered some of the recruitment struggles bogging down the specialty trades in particular, said Robert Heise, president of the Associated Builders and Contractors of Minnesota and North Dakota.

“The economy here is strong but what isn’t strong and what could be hampering growth in specialty trades is workforce development. What we need are more craft professionals,” he said. “If we could find those people, we would have growth in the specialty trades. The fact of the matter is we cannot find those people right now.”

But Dave Semerad, who heads Associated General Contractors of Minnesota, said deceleration in the specialty trades won’t upend the broader construction market. Instead, he said, a well-stocked project pipeline will carry it forward for the foreseeable future.

“There’s a lot of work that’s being planned right now,” he said. “Right now, you’ve got big projects, and I think a lot of these smaller projects and mid-size projects will be coming online later this year and into next year.”

Semerad doesn’t expect a sharp uptick in construction activity, but a steady flow of work will likely help tighten the gap between the sector and others that have showcased their job-creation potential in recent months.

Employment sectors posting the biggest gains in March include education and health care, which led the pack with 5,800 new jobs — 3,800 from the private education industry, clocking in with its steepest gains since mid-2011, Hine said.

Trade, transportation and utilities added 1,800 positions, outmatching government (up 1,700), manufacturing (up 1,600), information (up 800) and other services (up 700).

The private sector is boosting the overall jobs picture with a 2.2 percent rate of growth, the fastest in more than two years though it falls short of the 2.6 percent national average, Hine said.

Financial activities held steady, while professional and business services lost 3,600 jobs. Logging and mining shed 100 positions, matching losses in the leisure and hospitality space.

March’s employment figures lag behind February, even after DEED revised February’s tally downward from 11,800 new jobs to 10,500.

The state’s seasonally adjusted unemployment rate remained at 3.7 percent in March, holding steady for the eighth month in a row. The national unemployment rate for March hovered around 5.5 percent.

Though Minnesota’s unemployment figures went unchanged, its workforce participation rate inched up to 70.5 percent.

That marks the third consecutive monthly increase in the labor force participation rate, and it pumps up the number of Minnesota workers to a record 3.02 million – an increase over February, when the figure passed 3 million for the first time, after revisions last year.

Sustained growth in the labor force is an encouraging sign for Minnesota, but Hine cautioned it can’t last. Eventually, he said, it will buckle under constraints that will reshuffle the job marketplace.

Still, workforce expansion lately leaves the state better positioned ahead of those looming shifts in the employment landscape.

“It’s quite promising that even if it’s temporary, an increase in our labor force here provides the wherewithal to continue job growth at a decent rate even as we look down the road and see that those constraints may become more binding,” Hine said. “This is a welcome but still short-term phenomenon.”

The Jobs Picture

Minnesota year-over-year employment growth by industry sector as of March 2015

Number of Jobs Gained or Lost % Change from 2014
Total Non-Farm Employment 50,829 1.9
Logging and Mining 44 0.7
Construction -25 -0.0
Manufacturing 6,794 2.2
Trade, Trans. and Utilities 8,499 1.7
Information 505 1.0
Financial Activities 426 0.2
Prof. and Bus. Services 8,973 2.6
Ed. and Health Services 14,246 2.9
Leisure and Hospitality 8,037 3.4
Other Services 3,263 2.9
Government 67 0.0

Source: Minnesota Department of Employment and Economic Development

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