What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz

Duluth-Superior still lag behind the rest of Minnesota

Posted by: Adam Belz under Business trends, Economics Updated: September 9, 2013 - 7:33 PM

The Duluth-Superior job market is lagging behind the rest of the state.

Unemployment is still 6.5 percent, and the economy has added only 632 jobs in the past 12 months.

6.5 percent unemployment is still better than the national average, but look how Duluth-Superior compares to the other metro areas in Minnesota:

But goods-producing employment has stalled since 2011, and economists at Wells Fargo wrote last month that “Duluth’s recovery will remain relatively tenuous.”

The Twin Ports economy has been growing – GDP actually grew slightly faster than it did in the Twin Cities between 2007 and 2011. Manufacturing output grew by 29 percent over that period, and the job market has improved.

In a report about the Minnesota economy that’s mostly positive, the section on Duluth sticks out for its negativity:

Duluth’s employment growth remains behind that of the state and nation. Education and health services have been stuck in neutral since 2009, and retail trade has had a similar fate. The shrinking population is exacerbating the situation, with fewer people to demand health services from the metro area’s largest employer, Essentia.

The Duluth area enjoys rich mineral deposits and strong infrastructure. Examples include a copper, nickel and precious metals mine near Ely, and Essar Steel’s under-construction iron ore mine and pellet plant near Hibbing.

But according to Wells economists Mark Vitner and Michael Wolf, the slowing Chinese economy and several new mines coming on line have led to an excess supply, depressing prices. Also, Duluth’s population fell in 2012, and the report notes some mixed indicators in the local housing market.

I ran the report by Brian Hanson, president of Apex, an economic development group based in Duluth, and he had a few points to make.

First, he points out, the metropolitan statistical area stretches to the Canadian border and includes Hibbing, Eveleth, Virginia, Ely and all of one Wisconsin county.* Unemployment in Duluth -- 5.9 percent -- is lower than in the expansive statistical area. The city proper's jobless rate is lower than in Range towns or Superior.

Population in the metro area, said Hanson, fell by just 200 people, not a calamitous decline. “OK, that is a shrinking number, but wouldn’t stable paint a more accurate picture?” he said.

And Hanson said the housing market in Duluth is just fine.

“With regard to housing, for the first time I can remember, there is spec housing going up in Duluth,” he said. “Plus, Bluestone Commons is adding hundreds of units of student and young professional housing next to the UMD campus. Very exciting.”

*this post has been amended to be more specific about the size of the Duluth-Superior MSA

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