The recession in the U.S. economy during 2001 hit the manufacturing sector
hard nationally and in the Ninth District. Over 117,000 district manufacturing
jobs were lost between the sector's peak in August 2000 and December 2002,
a 4.4 percent annual decrease.
However, recent declines in manufacturing employment come in the context
of an industry that has displayed soft employment growth for decades.
Manufacturing employment hasn't kept pace with overall employment. From
1950 to 2000 district manufacturing employment increased 1.1 percent at
an annual rate, while total nonfarm employment increased at a 2.2 percent
annual rate. In addition, the percent share of district manufacturing
employment as a percent of total nonfarm employment decreased from 30
percent in 1950 to 17.5 percent in 2000.
Some have expressed concern that recent declines in manufacturing employment
have hurt firms in rural areas more than manufacturers in urban areas.
However, recent decreases in district manufacturing employment were generally
spread evenly among urban and rural areas. (Based on manufacturing employment
numbers for district states and metropolitan statistical areas (MSAs),
two-thirds of manufacturing jobs were located in MSAs during 2000.)
Source: U.S. Bureau of Labor Statistics
From the mid-1990s through 2002, manufacturing employment
in urban and rural areas increased and decreased at similar rates in all
states, except Minnesota where non-MSA employment grew about 3 percent
faster than manufacturing employment in MSAs from 1991 to 1997. However,
from mid-2001 to 2002 manufacturing employment in rural Minnesota decreased
about 4 percent more than MSA manufacturing employment.
Specific industries that followed the overall Minnesota trend in urban/rural
manufacturing employment include fabricated metal products, industrial
machinery and equipment, instruments and related products, paper and allied
products, and rubber and miscellaneous plastic products. All of these
industries demonstrated stronger growth in rural manufacturing employment
compared with MSAs in the mid-1990s and deeper rates of decline in mid-2001
Eva Lassemo, research assistant, contributed to this article.