The economic recovery: Is it happening in Dakota County?

by Sarah Allen and Kristina Ericksen

Economic recovery is a phrase passed through mouths of newscasters, politicians and even your neighbors, but what does it really mean?

Sun Thisweek and the Dakota County Tribune reporters will be writing additional stories in the coming weeks about the state of the economy. Send story ideas to  tad.johnson@ecm-inc.com.

Sun Thisweek and the Dakota County Tribune reporters will be writing additional stories in the coming weeks about the state of the economy. Send story ideas to
tad.johnson@ecm-inc.com.

With so many mixed messages, it is hard to break through the clutter of statistics.

Overall, analysts predict a period of recovery in the coming years. But how do people in Dakota County know that economic recovery is really happening?

Statistics show that the economic recession is loosening its grip, yet about half of Dakota County residents still feel they will face the same financial situation in the coming year, according to the 2013 Dakota County Resident Survey.

There has been a 4 percent increase of residents who believe that jobs and economic development are the most serious issues that Dakota County is facing since 2008.

Statistically, Dakota County has fared better than most surrounding counties throughout the recession.

Currently, 4.7 percent of eligible Dakota County workers are unemployed.

Ramsey County has a 4.9 percent unemployment rate, Anoka County 5.2, Rice County 5.9, and the rates generally increase in counties farther out from the Twin Cities metro area.

Not only has Dakota County fared better throughout the recession, but the state of Minnesota also has performed better than the national average.

The current national average rate of unemployment is 7.1 percent.

Minnesota is well below that at 5.4 percent.

From 2007 to 2012, Dakota County employment in some sectors grew. In finance,  the number of jobs increased by 13 percent, health care 11 percent and management 8 percent. On the other hand, construction jobs in the county have decreased by 28 percent and professional services by 19 percent over the same time period.

The Minnesota per capita real gross domestic product grew from $45,000 in 2010 to $47,000 this year – a 4 percent increase. Per capita real GDP represents the market value of all Minnesota goods and services divided between the state population.

These state averages have placed Minnesotans in a successful and growing region of the country.

Employment

Dakota County employment has not fully recovered from its dramatic drop in 2008, but opportunities are slowly beginning to open up.

According to Rachel Vilsack of the Minnesota Department of Employment and Economic Development, employment within Dakota County has been increasing since the jobless peak of 7.5 percent in 2009.

Yet it still remains below its original 2007 level.

Vilsack has hope for even better numbers on the horizon.

Through the end of 2013, a statewide 1.4 percent increase in employment is expected.

To understand the economic state of Dakota County, the metro area must be taken into account.

Half of Dakota County residents work within the county, with 15 percent working in Eagan, 8 percent in Burnsville, 5 percent in Apple Valley, 4 percent in Lakeville, 3 percent in Farmington, and 2 percent in Rosemount.

The other half of local residents make their way across county lines every day for work.

Employment in the metro area pulls 10 percent of Dakota County commuters to Minneapolis, 14 percent to St. Paul, and 8 percent to Bloomington, according to the 2013 Dakota County Resident Survey.

Every work day, the population of Minneapolis grows by 100,000 and St. Paul by almost 40,000, while Lakeville and Apple Valley lose almost 30,000 workers.

People may bring their earnings home at night, but they may be buying their morning coffee, eating lunch and running errands at places near their work.

Because residents cross county lines to work and spend their money, the economic well-being of Dakota County cannot be examined independently. The mutual relationship between local residents and their commute downtown has boosted Dakota County’s economy.

Analysts agree that Dakota County’s proximity to the Twin Cities is one reason its employment has fared better than other counties.

Burnsville Economic Development Director Skip Nienhaus cites the city’s accessibility to the metro area as a reason for lower unemployment rates, in addition to the area’s local business diversity.

A wider range of work options including restaurants and retail create more opportunities, in comparison with other counties comprised mostly of agricultural and recreational businesses.

Dan McElroy, president of Hospitality Minnesota and previous mayor and state legislator from Burnsville, agrees with Nienhaus.

“The recession impacts people differently, though Dakota County has fared slightly better than the statewide average,” McElroy said.

On the rise

Business in Dakota County also appears to be on the rise.

The health care sector, often seen as recession-proof, is expected to continue expanding. One in 10 jobs in Dakota County are in this sector.

Dakota County is also home to many construction and manufacturing jobs. These sectors make up 15 percent of jobs within the county. These too are expected to rise. However, they have not surpassed their prerecession levels of employment.

Throughout the past year, Minnesota has gained more than 50,000 jobs. While the state has typically fared better than others throughout the recession, the past few months of job growth have fallen below the national average. A cold and wet spring has dampened business growth, especially for entertainment, outdoor activities, and seasonal shopping.

Overall, the extended winter this year slowed business for construction, leisure and hospitality, and local government, according to DEED.

Road to recovery

The idea of economic recovery is not just an aspiration but a real possibility for Dakota County.

Economic recovery is not simply an equation but a sum of parts including employment rates, weather impacts, business sector growth, location and diverse opportunities.

Although Dakota County lost almost 600 employers and 4,067 jobs from 2007 to 2012, unemployment rates are at a five-year low and businesses are slowly growing, according to the Metropolitan Council.

This past year the weather hurt economic recovery, but Dakota County’s proximity to Minneapolis and St. Paul and Dakota County’s diverse business community have been key to its survival.

Although Dakota County has not recovered to its prerecession levels, local analysts agree that the numbers add up to a positive future.

Sarah Allen can be reached at dc.intern@ecm-inc.com. Kristina Ericksen can be reached at av.intern@ecm-inc.com.

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