Two More Years Needed For Economic Recovery

Minnesota’s economy is improving, but don’t look for it to be back at full strength any time soon.

State Economist Tom Stinson predicts that the economy will not rise back to pre-recession levels for at least two more years.

There has been good news for agriculture, health care and tourism industries in recent months. And Minnesota sales to other countries are looking up.

But construction and associated industries such as lumber continue to struggle.

“Minnesota has been doing a little better than the national average in terms of employment,” Stinson said.

From an economist’s point of view, he added, “we’ve had a very good year this year.”

The state’s economic consultant, Global Insight, predicts that United States employment will not reach its pre-recession levels until late 2013 and the unemployment rate will top 8 percent until the following year.

Stinson and his Minnesota colleagues say that the state economy is going better than the national average.

Minnesota lost 157,000 jobs during the December 2007-to-September 2009 recession. Since then, “the recovery appears to be progressing faster here than nationally,” a Management and Budget report says. Minnesota’s unemployment rate, at 7.1 percent, is 2.5 points lower than the national average.

The state regained almost 55,000 jobs since the September 2009 low.

The hospitality and leisure industry grew the fastest, with 13,000 jobs added in the past year.

At the same time, construction employment fell by 6,000 and local government shed 4,000 workers.

Some of the brightest economic news comes in the area of exports.

“Minnesota exports have come back strong this year, gaining 18 percent year-to-date,” said Commissioner Dan McElroy of the Department of Employment and Economic Development. “This is good news for state manufacturers and another sign that the global economy is recovering.”

Stinson said manufacturing is doing well, although not on par with some other economic segments, with employment rising the past few months.

Minnesota’s third-quarter exports, mostly from manufacturing, rose to $4.4 billion, up from $3.7 billion a year earlier.

Exports to China rose 40 percent in the last year, the biggest increase.

“North America and Asia remain strong markets for Minnesota manufacturers, each accounting for one-third of our foreign sales in the third quarter,” said Ed Dieter, acting director of the Minnesota Trade Office. “Canada and China increased exports significantly, but Thailand, Germany, Mexico, Taiwan, Japan and Brazil also had solid gains of more than $30 million each.”