7 posts from June 2013

Fewer teens on MN roads and fewer crashes. Coincidence?

It’s widely known (and statistically proven) that young drivers are not the best drivers on the road. The good news for everyone else on the road in Minnesota is that the number of young drivers has been declining.

There are two sources behind this trend. First, the size of this population has been slowly declining in Minnesota. Data from the Census Bureau show that the population ages 15 to 19 years old has fallen by almost 4 percent since 2007. Second, the number of licensed drivers (ages 16 to 20) is on a slightly steeper downward path, declining by 7 percent over the same period, because a modest but notably smaller share of this population cohort is getting a license (see Chart 2).

Young Drivers -- 6-28--13

The trend in fewer young drivers appears to be showing up on the roads, at least to some degree. Drivers under the age of 21 make up just 7.8 percent of licensed drivers in Minnesota, but are involved in 13.4 percent of crashes, according to recently published figures by the Minnesota Department of Public Safety. Since 2007, the number of vehicle crashes has fallen by 15 percent (see Chart 3). The number of fatalities last year rose by 7 percent, but this was the first increase in road deaths since 2007. Over the past decade, road deaths have fallen by 40 percent.

Young drivers -- ch 3 6-28-13

Healthy jobs checkup: Minnesota closing job gap with Wisconsin

Don’t look over your economic shoulder, Wisconsin, because the Gopher State is fast catching up on the total number of jobs.

In the years preceding the Great Recession, Wisconsin had a sizable cushion of jobs over its westerly neighbor (see Chart 1), much of it due to the fact that Wisconsin’s population is slightly larger. Both states saw a considerable decline in jobs during the recession, but Minnesota has been adding jobs during the recovery at a much faster rate. Since 2005, the jobs gap has been sliced from 137,000 to just 35,000.

Some of the closure has come from faster population growth in Minnesota. Since 2005, Minnesota has added almost 60,000 more people than Wisconsin over the same period, and the population gap shrank to less than 200,000 people. All other things being equal, population growth alone would have sliced the jobs gap between the two states by upward of 30,000.

But Minnesota firms are also simply doing more hiring than those in Wisconsin. A big part of job growth in Minnesota has been in health care, a sector that was already larger in Minnesota in 2005 in terms of total jobs (see Chart 2), according to data provided to the fedgazette by EMSI, a private labor market data firm. Since 2005, Minnesota has added 53,000 more health care jobs (19 percent growth), compared with about 28,000 (about 10 percent growth) in Wisconsin over the same period (see Chart 2).

MN-WI jobs gap ch 1-2 -- 6-28-13

(EMSI data reflect those of the Quarterly Census of Employment and Wages from the Bureau of Labor Statistics. But EMSI also uses other sources and estimates to fill in gaps that can occur from nondisclosure or jobs that are not covered by unemployment insurance, which is the basis for the QCEW.)

Health care job growth in Minnesota was widespread in terms of both geography and subsectors, but not so for Wisconsin, according to EMSI data. Forty percent of Minnesota counties saw health care jobs rise by 18 percent or more since 2005, compared with 22 percent of Wisconsin counties. Hennepin and Ramsey counties (home to Minneapolis and St. Paul) saw health care job growth of 20 percent and 27 percent, respectively. In contrast, health care jobs in Milwaukee County grew by less than 200, or zero percent after rounding. Dane County, home to Madison, beat the Wisconsin average, but still managed just 11 percent growth.

In both states, job growth was robust in areas serving rising elderly populations, maybe ironically with the exception of nursing homes, where job growth was flat (actually negative in Minnesota) as public care programs deemphasize that costly care option. But big differences between the two states came in general medical and surgical hospitals, where Minnesota saw growth of almost 18,000 jobs (22 percent), compared with 6,000 (6 percent) for Wisconsin. Minnesota also saw much faster job growth among HMO medical centers, therapists (physical, occupational, speech) and audiologists, and outpatient mental health and substance abuse facilities.

Oil impact on Montana: Tale of the tip

As oil and gas drilling surges in western North Dakota, the effects are being keenly felt across the border in northeastern Montana.

For cities and towns on the western edge of the Bakken formation, the oil boom may have come and gone, as the state’s oil output has dropped by close to one-third since 2006, while North Dakota’s has skyrocketed. But many Montana communities in the region are nonetheless seeing rapid growth as service centers and bedroom communities for oilfields in North Dakota. Communities such as Sidney, Fairview and Bainville are only a 30 to 40 minute drive from Williston, N.D., in the heart of the Bakken.

Gauging population gains is difficult because Census counts and estimates typically undercount oilfield workers living in crew camps or someone’s basement. So state and local officials have turned to proxy measures to get a handle on the influx of people and determine how much of it is related to energy development in North Dakota.

One of those measures is the amount of trash hauled to municipal landfills—so-called tipping volumes. Data compiled by the Montana Department of Environmental Quality show that landfill tonnages at the Richland County Landfill near Sidney, which also serves Fairview, Bainville and other towns, increased moderately during the oil boom in eastern Montana in the mid 2000s (see chart). But dumping rose sharply after 2008, when oil production fell in the region but shot up in North Dakota. In contrast, a landfill in Sheridan County—farther from the core of the Bakken in extreme northeastern Montana—has seen only a slight tonnage increase in recent years.

“It’s a very clear indication that all of the activity that you see in eastern Montana counties is related to the development in North Dakota,” said Mark Haggerty, an economist with Headwaters Economics in Butte, Mont., who has seen the landfill data. The tipping index jibes with other metrics for northeastern Montana, such as subdivision proposals and traffic counts.

Unfortunately for local communities, resources are scarce to address the impact of oil-related spillovers on roads, sewage systems and other public services. Oil and gas production taxes paid by firms employing workers living in Montana accrue to North Dakota, not the Treasure State. Local governments in Montana see relatively little revenue from state oil and gas taxes because of production declines and lower effective tax rates compared with North Dakota.

For much more on the fiscal effects of the Bakken oil boom, look to the forthcoming July issue of the fedgazette.

MT garbage trends 6-17-13

Minnesota getting in the broadband fast lane

While high-speed internet access is not quite universal, subscribers in Minnesota have seen strong upgrades in high-end availability in just a year and a half, according to Connect Minnesota, a nonprofit advocate for broadband access.

Technically, broadband is defined as anything over 768 kilobits per second (kbps), and close to 100 percent of people in Minnesota have access to this level of service (or better). Of course, that’s abysmally slow by today’s standard. Speeds of 3 megabits per second (mbps) generally allows for consistent web browsing, but higher speeds are necessary for efficient video  streaming — upwards of 10 mbps for high-definition video.

Recent surveys by Connect Minnesota show that access in the state is expanding fastest at the high end. From December 2011 to May 2013, the percentage of households with access to 100 mbps or more went from 45 percent to 76 percent (see chart). Smaller, but still substantial gains were also made at speeds that were somewhat slower but still many times faster than the federally defined minimum.

The greatest concentrations of high-end speeds are found in the Twin Cities, but also in a large swath of rural Polk County, along the Red River bordering North Dakota—the result most likely of being across the river from Grand Forks (see map from Connect Minnesota). The map also shows large areas still unserved by broadband, but these are mostly wilderness areas with few households, such as the Boundary Waters Canoe Area.

Broadband -- 6-7-13

Party like it’s 2012? Gross output up across the Ninth District

While it might not feel like a banner year given modest economic growth nationwide, the Bureau of Economic Analysis recently released gross domestic product (GDP) figures for 2012 showing that every state in the district hit record levels of output, save for Michigan. However, when measured on a per person basis, only Minnesota and North Dakota are at record levels.

Real GDP in North Dakota grew a whopping 13.4 percent over 2011 (see table). All major industry sectors grew in the state. Led by the oil boom, the mining sector (which energy is a part of) more than quadrupled over the past five years. Transportation and warehousing grew by 35 percent, and construction grew by 29 percent.

Minnesota was the next fastest, at 3.5 percent over 2011, good for fifth highest in the country. Durable goods manufacturing increased by 9 percent, and the real estate sector increased by 7 percent. Agriculture also had a good run with a 6 percent increase and was up 32 percent from 2007. Mining dropped by 14 percent last year, ending a strong run that saw the sector nonetheless grow by 43 percent since 2007.

Montana grew at a moderate 2.1 percent rate. Professional, scientific and technical services grew at a robust 8 percent from 2011, and durable goods increased by 16 percent. However, nondurable goods production dropped 3 percent.

South Dakota grew by an anemic 0.2 percent, mostly on the heels of a poor year in agriculture as output dropped by 16 percent from 2011 (though the sector was still up by 37 percent from 2007). On the positive side, durable goods increased by 10 percent, and recent surveys suggest more of the same for manufacturing in 2013.  

State GDP -- 6-7-13

Wisconsin economy sputtering; North Dakota's is roaring

Few states are hitting the cover off the economic ball these days like North Dakota. Few states are similarly struggling like Wisconsin, according to a monthly index of economic indicators produced by the Federal Reserve Bank of Philadelphia.

The State Coincident Index tracks four state-level indicators—nonfarm employment, average manufacturing hours, unemployment, and real wage and salary disbursements. It then uses a dynamic single-factor model to create comparable indexes for each state over time (back to 1979 for most states).

From January 2011 through April of this year, North Dakota’s index score rose by 35 points (see Chart 1), easily the highest in the nation; the next closest was Utah at 18 points. That growth propelled North Dakota into the top five in terms of composite score among states (see Chart 2).

Wisconsin, on the other hand, had the sixth lowest index score, at 139. Maybe worse, the state’s score has been relatively flat since 2011 (when it ranked 10th lowest) and recently turned negative. Michigan’s score is considerably lower than Wisconsin’s and third lowest among all states. But the rate of index growth since 2011 is among the top-five highest in the country.

Philly fed incident charts 1-2 -- 6-5-13

Ninth District manufacturing continues expansion ahead of nation

While manufacturers nationwide continue in something of a holding pattern according to recent surveys, manufacturers in three Ninth District states continue to see growth, according to a monthly survey of supply managers by Mid-America Business Conditions Index, published by Creighton University.

The May survey showed overall sentiment in Minnesota and the Dakotas mostly holding in the mid-50s (an index score over 50 indicates growth; below 50, contraction). The index for employment remained in growth territory but saw both positive and negative change from April in the three states (see charts). The overall index for the nation turned negative (at 49), while employment sentiment teetered on the growth fence (50.1).

The Dakotas are taking turns grabbing headlines. In May, South Dakota saw very strong growth in overall sentiment as well as for employment, while its northern neighbor declined marginally on overall sentiment and continued a volatile pattern in employment. Ernie Goss, director of Creighton's Economic Forecasting Group, said that wages have grown very strongly in North Dakota manufacturing, and “nondurable goods manufacturers, especially food processors, are experiencing very healthy growth. On the other hand, durable goods manufacturers are experiencing pullbacks in economic activity.”

Mid-America June survey -- 6-5-13