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

Job growth since recession is still better in Minnesota than Wisconsin

Posted by: Adam Belz under Business trends, Economics Updated: September 30, 2014 - 9:34 AM

Yes, Minnesota ranked last in Midwest private sector job creation for the most recent 12 months in one set of high-quality jobs data.

Yes, this undercuts some of the job market growth we've been reporting over the past few months based on the monthly numbers.

But no, it doesn't mean Wisconsin is doing better than Minnesota.

Since the recession, Minnesota's job market has been outperforming Wisconsin's by a wide margin

Look at the five years from March 2009 to March 2014. (I will surely be accused in the comments of picking an arbitrary time period, so let me try to head that off: I like this time period because 1) five is a nice round number, 2) the starting point is the bottom of the recession, and 3) the ending point is the most recent reliable job data we have.)

It's the same data that said private sector job growth has slowed in Minnesota in the past 18 months (which it has). Same data, it just extends back further.

Minnesota is top half in the Midwest and Wisconsin's in the relegation zone.

I don't think the governor of a state has much to do with short-term economic growth. The economy is moving in long, slow ways that we don't fully understand. But job growth seems to come up now that it's election season, and I did write a blog post and story last week on Minnesota's last-place-in-the-Midwest finish in private sector job creation in the most recent 12-month period of the most reliable jobs data.

Those 12 months shouldn't be ignored, but they also shouldn't be taken in isolation. Over the long haul, Minnesota is outperforming Wisconsin in almost every measure. Whether the credit goes to Mark Dayton, Tim Pawlenty, Jesse Ventura, Paul Wellstone, Hubert Humphrey, Harold Stassen or John Pillsbury, well, you can decide.

Two world maps of Minnesota exports -- 1996 and 2013

Posted by: Adam Belz under Business trends, Economics Updated: September 30, 2014 - 4:59 PM

In 2014, almost three-quarters of Minnesota's exports went to 10 countries.

I wrote about exports to Africa growing last week, but as you can see, that's not where the action is right now. Minnesota's ten biggest trade partners are Canada, China, Mexico, Japan, Germany, Belgium, South Korea, the Philippines, the U.K. and the Netherlands.

Scroll around, zoom in and click on the map. You might be surprised that Minnesota exports twice as much to Singapore as to India, or that Saudi Arabia is a bigger market than Russia.

Sorry, don't have data on type of export by country at the state level, and these numbers, like most stats, should be taken with a measure of caution. I've calculated 1996 and 2013 exports by country using quarterly historical export numbers from DEED.

You can toggle back and forth betwen the two maps here:

Harvard prof says economy "disturbing," but not because of recession: 5 takeaways

Posted by: Adam Belz under Business trends, Economics Updated: September 30, 2014 - 12:04 AM

Michael Porter was in the Twin Cities on Monday talking about regional clusters, American stagnation and the country's failed economic development efforts.

He was helping roll out Cluster Mapping, which he, the U.S. Department of Commerce and many others hope will be a tool for better economic development policy. I wrote a story for the print edition, and here's the U of M's Lee Munnich's op-ed.

For the purposes of this blog, here are five takeaways from Porter's presentation, and from the data:

1. Most Americans are struggling in the economy and it's not because of the recession.

Porter, in his speech earlier today at the Humphrey School, said this:

What we all know is that well before the recession that hit in 2008, we were on the wrong path in America. It wasn’t the recession. The recession was an extreme event that was triggered by a variety of circumstances, but actually we were on a very disturbing path.

The problem is that wages are drying up for middle-skill jobs. Very high-skill jobs are doing better, but wages for jobs that require a college degree or less are either stagnant or sinking in the past 12 years. Porter showed this slide:

2. It's a knotty problem, causing the rise of inequality and driven by a lot of forces, but Washington is not helping.


It’s being cast as fair or unfair, but it’s really all about the fundamental underlying drivers of competitiveness and prosperity that we really haven’t been able to address in any systematic way in America for the last 20 or 30 years. We used to be the innovator. First universal public educaiton, first widespread university system accessible to all. First interstate highway system. Best infrastructure…Now we’re not. We’re just not getting any of it done. We can’t even agree to allow people who get a Ph.D in America to stay in America. We can’t even agree on that, despite the fact that we’re just dying for high skills in this economy.

3. Porter believes the key to higher-wage jobs is for regions in the U.S. to build clusters of companies that sell in the global marketplace and win there.

These clusters are in what he calls the "traded" economy -- that is, the global economy. The "local" economy provides all the jobs that pretty much every community has no matter what -- jobs at restaurants, doctor's offices, gas stations, etc. For now, the U.S. is not doing well in the traded economy, Porter said:

All the jobs we’ve created over the last 15 or 20 years were in the local economy, not in the traded economy. We have zero net traded job creation over the last couple decades in the American economy. If we’re exposed to international competition, no new jobs. If we’re sort of guaranteed the jobs because it’s local work, ok yeah, we can grow jobs there -- health care, government, construction. This all started a long time before 2008.

4. Minnesota has a big medical device concentration, but it also has clusters in marketing, IT, financial services and insurance.

This is from the mapping tool, which I highly recommend, and refers to the Minneapolis economic area, which includes St. Cloud, much of southern Minnesota and parts of Wisconsin and even South Dakota:

5. Minnesota ranks well in labor productivity and business creation, and really well in patent generation, but is lagging in exports.

We talked last week about how the U.S. is getting whipped by China in Africa, and I had a story about Minnesota exports to Africa, which are growing fast but from a small base. It looks like exports as a percent of GDP are relatively low for this region.

From the data tool:

Lots more data where that came from. The tool is easy to use and allows you to download the data on any report you create.

Mayor touts Duluth economy, GDP growth good, jobs lag

Posted by: Adam Belz under Business trends, Economics Updated: September 29, 2014 - 3:37 PM

Duluth Mayor Don Ness saw enough positive economic news last week about the Zenith City that he called a celebratory news conference.

“In recent years, we’ve had a general sense of optimism and progress in the city of Duluth, and now we’re seeing this play out with hard data," he was reported saying in the Duluth News Tribune. "It’s really exciting to see proof that Duluth is a city on the rise.”

The News Tribune reported: 

Ness pointed to the latest figures from the Minnesota Department of Employment and Economic Development that show Duluth’s unemployment fell to 4.3 percent in August — the lowest level the city has seen since December 2006.

He noted that August isn’t typically the strongest month for employment in the city either, with September, October and the holiday season usually bringing more jobs to Duluth. Compared with other Augusts, this year’s marks the lowest unemployment rate since 2001.

Ness also cited improved job opportunities throughout the Duluth-Superior metropolitan statistical area — including Douglas, St. Louis and Carlton counties. From July to August, the number of people working in the private sector in those three counties rose by 534, bringing the total headcount to 109,930...

Ness also took encouragement from a growing demographic. He noted that from 2009 to 2013, the number of people between age 25 and 34 living in Duluth grew by one-quarter.

Ness is not wrong about any of this, even though Duluth's overall job growth has been tepid

The state's second-largest metro economy is growing, with globe-minded companies and industries (I think of Ikonics International, taconite, paper, aerospace). The city is a trade center by rail and laker. Grain, coal, limestone and iron ore come and go from the ports.

Real GDP for the metro area has grown since 2009 faster than any metro economy in Minnesota and nearly twice as fast as the national average of 8 percent.

The one weak spot in Duluth has been overall job growth. The city is adding jobs slower than the rest of Minnesota. The metro area created only 947 jobs in the 12 months that ended in August, a growth rate of 0.7 percent.


Folks in Duluth are quick to point out that its numbers are dragged down by Superior, WI, and by the rest of St. Louis County.

When you pull out Duluth city limits, which is possible only with the higher-quality but time-delayed Quarterly Census of Employment and Wages, the numbers do improve.

Duluth's growth rate from the first quarter of 2013 to the first quarter of 2014 was 1.1 percent. And wages rose to $858 per week, a growth rate of 4 percent.

Opening Belz, Sept. 29

Posted by: Adam Belz under Business trends Updated: September 29, 2014 - 10:14 AM

State-owned flour mill in ND plans expansion, will be biggest in nation – Bismarck Tribune
Suburbs struggle to fill glut of big box stores – StarTribune
The North Loop of Minneapolis is drawing software companies – MSPBJ
Rail delays cause taconite backup – StarTribune
Billions fly out the door at PIMCO – WSJ
If you can work from home, where should you live? Prague – Marginal Revolution
Swiss voters reject single payer health care – AFP
A look at a schooner that sank in Lake Superior 115 years ago – Duluth News Tribune
Oil boom means big money for trust fund for water projects – Dickinson Press


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