How did Minnesota’s economic regions perform in the first four years of the decade?

Minimal growth in regional economies: Four of six regional economies experienced net declines in jobs and total labor force from 2019-2023.

Further, each region in Minnesota underperformed the U.S. economy so far this decade. The Twin Cities, which anchors the state’s economy, lost 1.2% of total employment from 2019-2023, compared to the U.S. which increased jobs by 3.4% in that time. Despite weak job recovery, each region saw positive gains in total payroll since 2019, and all but one (Northeast Minnesota) had positive GDP growth from 2019-2022 (latest available data for county/regional GDP).

Uneven recovery and growth across regions: From 2019-2023, Minnesota’s regional economies recovered and grew at an uneven pace. Two regions – Northwest and Central Minnesota – had more jobs in 2023 than they did in 2019. Northeast and Southwest Minnesota faced the steepest job losses over the first four years of the decade, declining by 3.6% and 2.1% respectively. Click here for a further breakdown of performance by region.

Low unemployment and tight labor markets: Like the state as a whole, slow economic recovery and growth in Minnesota’s regions is explained in part by declines in labor availability. However, this may not offer a complete explanation. For example, Southeast Minnesota grew the size of its labor force but had declines in total employment. And Northeast Minnesota had the largest decline in its available labor force but had the highest unemployment rate. Other factors related to economic competitiveness, industry mix and overall business growth may play a role in explaining regional performance.

Construction sector drove growth in most regional economies from 2019-2023: The construction sector was the leading contributor to job gains in three regions (Northeast, Northwest and Central Minnesota). It was the second leading industry in the Twin Cities and the fifth leading in Southeast. Only Southwest Minnesota had negative job growth in construction this decade.

Regions differed in sectors with the largest job losses: While there was a similar trend in industry leaders across regions, regions differed in which industries contributed the most to job losses. Health care and social assistance was the worst performing sector in two regions (Northeast and Southwest) but the top performing sector in the Twin Cities. Management of companies and enterprises (e.g. company headquarters) led job gains Southeast but led job losses in Central Minnesota and declined significantly in the Twin Cities as well. These differences highlight the importance of looking beneath statewide data to see how the same sector may vary significantly by region.

Click here to read more about trends in Minnesota’s regional economies

Article provided by: Grow Minnesota! Newsletter