State manufacturers rallied in 2021

There's momentum in Minnesota's economy.

Amid challenges even beyond the extraordinarily disruptive pandemic, the state's employers and workers have admirably increased employment, exports and — perhaps most importantly — confidence over the past year.

The Creighton University Mid-America Business Conditions Index, for instance, jumped from 65.1 in November to 70.2 in December. (A number above 50 suggests expansion and below 50 indicates contraction). Minnesota's metric was above the nine-state average for manufacturers.

Another report issued quarterly on exports further signals robust recovery from the depths of the pandemic-stricken conditions that hit hard in 2020. According to the Minnesota Department of Employment and Economic Development (DEED), state exports of agricultural, mining and manufactured products soared 29%, an increase of $1.3 billion, in the second quarter of last year.

Most notably, exports were 5% higher than the pre-pandemic second quarter of 2019 — an encouraging sign that the export sector has not only recovered but strengthened.

The state's jobs outlook is also brighter. Minnesota gained 8,600 jobs in November (the most recent data available) to lower the unemployment rate to 3.3%, according to DEED. That's low by any standard but particularly compared to the national rate of 4.2%.

The news could be even better if more Minnesotans were in the workforce, or more moved here from other states or countries. "Workforce is the differentiator for every community, every region in the state," Bob Kill, president and CEO of Enterprise Minnesota, a consulting organization that works with Minnesota manufacturers, told an editorial writer. "We have a phenomenal workforce," Kill added. "We just don't have the numbers."

Kill said that the challenge is even more acute in greater Minnesota — an issue that's also caught the attention of DEED. "I think what everybody is feeling right now is just a huge workforce pinch, not just in terms of the availability of employees, but people staying healthy to actually come into the job and do the work," the agency's commissioner, Steve Grove, told an editorial writer.

The challenge will grow due to demographic changes as waves of baby boomer retirements continue to roll in, with some accelerated due to the pandemic. Housing and child care challenges are also among the factors keeping badly needed employees from returning to or entering the workforce, which should concern legislators who will soon convene for the 2022 session.

Yet Minnesota's solid economic foundation presents opportunities for further growth — even amid supply chain challenges and other problems that are global, and thus less controllable. Overall, Grove added, "Minnesota has a more diverse economy, which has been a helpful place to be at a time when disruption and challenge hits."

The economic downturn and steep job cuts appropriately made headlines at the beginning of the pandemic. But the rapid response by Minnesota employers and workers and the steady recovery that's resulted is just as significant a story.

All involved deserve credit for creating the conditions that should lead to even stronger growth in the months and years to come.