Minnesota’s Economic News — W/E 9/24/21
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A lot of states are experiencing tremendous job loss due to the economic shutdown. In the beginning, most of these job losses were concentrated in the service industries. But the manufacturing sector is starting to feel a squeeze from the shutdown. Manufacturing companies are temporarily cutting employment for sustainability or permanently cutting their workforces. Manufacturing has been hurt by both loss of business and also the high level of uncertainty surrounding the lockdown.
Minnesota manufacturing companies are experiencing a worse downturn caused by the virus. Manufacturing companies are now laying off employees at higher and increasing rates.
A sign-maker in Brooklyn Park permanently laid off 178 employees. An optical-glass company mothballed a factory in Faribault. Polaris shut down plants worldwide, including in Minnesota, Iowa and Wisconsin.
The shutdown in Minnesota is now in its fourth week and has been extended up until May 4th with the possibility of some changes. In the beginning, service industries were at a bigger risk for job loss because of the high levels of personal contact their operations require. But now manufacturing companies are facing their own issues. This is due to the fact that manufacturing companies are not getting orders for their products. The uncertainty surrounding the Coronavirus is also adding another layer of risk.
For the week ending April 4th, the data is showing large increases in unemployment benefit claims in industries outside service related sectors. Manufacturing unemployment claims, for instance, have grown over 100% for the week ending April 4th, while sectors like food service have seen a drop in the number of people applying for unemployment benefits. While overall total job losses are significantly higher in service industries, the new trend is likely to persist with extended shutdowns.
More than half of manufacturers surveyed across Montana, North Dakota, South Dakota, Minnesota, Wisconsin and the Upper Peninsula of Michigan told the Minneapolis Fed in mid-March they planned to cut workers over the next six months. Another 20% said they didn’t know.