From the July 2012 South Dakota e-Labor Bulletin
The 2010-2020 round of South Dakota worker projections by class of worker and industry were recently completed by the Labor Market Information Center (LMIC). Historical time-series data and state and national economic trends were used as variables in various statistical models to project workforce levels. (A general assumption is made that no major catastrophic events or natural disasters that would significantly affect economic activities of these industries will occur during the projection period.)
A look at which types of industries are growing, and which are not, provides a synopsis of the economy as a whole. The general outlook for South Dakota is characterized by job growth in the coming decade as our state recovers from the recession. On the national level, many ponder whether the nation will experience a double-dip recession and a stagnated economy or just show slow but continued growth. Any of these situations could affect South Dakota's projected outlook.
From 2010 to 2020, the total number of workers in South Dakota is projected to increase by 41,145 (or 8.9 percent) to a total of 504,120 workers. On the national level, the total employment level is expected to increase by 20.5 million jobs (or 14 percent). The national growth rate is quite a bit higher than South Dakota's rate as the U.S. was hit quite a bit harder with job losses during the recession. Therefore, the national projections include a higher rate to account for recovery from the recession. Referencing the official recession period as determined by the National Bureau of Economic Research (NBER), which is December 2007 through June 2009, the seasonally adjusted nonfarm worker level on a national basis was roughly 7.5 million jobs (5.4 percent). Despite the official end of the recession, non-farm employment declined by another 1.2 million until reaching a trough in February 2010.
During the official recession period, South Dakota lost 4,400 jobs (1.1 percent). However, as the recession hit South Dakota a bit later than the nation as a whole, between the recessionary peak and trough for our state, there was a seasonally adjusted loss of approximately 7,800 workers (1.9 percent).
The South Dakota projections include three categories of workers:
The nonfarm wage and salaried workers category includes only those wage and salaried workers who are covered under the South Dakota Unemployment Insurance program and those who work for non-profit organizations, such as private colleges and religious organizations. This category is the major component in South Dakota making up 86.9 percent of the workforce. The nonfarm wage and salaried workers category is also projected to grow the most to 9.9 percent by 2020.
|South Dakota Wage and Salaried Workers by Industry Division
|Industry Title||2010 Workers||2020 Workers||Actual Change||Percent Growth|
|Total of All Industries||462,975||504,120||41,145||8.9%|
|Non-agricultural Self-Employed and Unpaid Family Workers||26,880||28,275||1,395||5.2%|
|Agriculture, Forestry, Fishing & Hunting (farm employment)||33,580||33,470||-110||-0.3%|
|Nonfarm Total Wage and Salaried Workers
(excludes self-employed and unpaid family workers)
|Source: Labor Market Information Center, SD Department of Labor, July 2012.|
The agriculture and related workers (farm employment) is the only one projected to slightly decline in South Dakota. Within the Agriculture, Forestry, Fishing and Hunting industry, the number of workers is projected to decrease 110 workers (or 0.3 percent) by 2020.
Farmers, ranchers and other agricultural managers are projected to drop nationally by 96,100, which is the most of any occupation according to the U.S. Bureau of Labor Statistics (BLS). Nationally, overall employment in agriculture, forestry, fishing and hunting is expected to decrease by 4 percent. This industry has been declining since 1980. Several reasons are cited for the continued decline. The declines have been linked to consolidation of smaller farms, and technological advances have also improved production and efficiency while requiring fewer workers.
|South Dakota Industry Employment Projections 2010 - 2020
Top Ten in Industry Growth
|Ambulatory Health Care Services||14,700||18,890||4,190||28.5%|
|Waste Management and Remediation Service||790||975||185||23.4%|
|Construction of Buildings||5,180||6,325||1,145||22.1%|
|Museums, Historical Sites and Similar Institution||490||590||100||20.4%|
|Wholesale Electronic Markets and Agents and Brokers||1,420||1,700||280||19.7%|
|Securities, Commodity Contracts and Other Financial
Investments and Related Activities
|Support Activities for Transportation||780||920||140||17.9%|
|Fabricated Metal Product Manufacturing||3,435||4,020||585||17.0%|
|Computer and Electronic Product Manufacturing||2,140||2,480||340||15.9%|
|Couriers and Messengers||1,235||1,425||190||15.4%|
|Source: Labor Market Information Center, SD Department of Labor, July 2012|
The projected South Dakota industries that will grow the most over the next 10 years are trending consistently with the rest of the nation. The national trend, according to the BLS, is that service-providing industries are anticipated to generate about 18 million new wage and salaried jobs. Nationally, industries related to health care, personal care and social assistance, and construction are projected to have the fastest job growth between 2010-2020.
Ambulatory Health Care Services
In South Dakota, the number of workers employed in the Ambulatory Health Care Services subsector is projected to increase by 4,190 workers (or 28.5 percent) over the next 10 years. The aging population and advancements in medical technologies will help ensure continued worker growth within the health care services industry, especially for hospitals. This subsector belongs to the Health Care and Social Assistance industry which is expected to grow nationally by 5.7 million new jobs (or 33 percent). The continuing shift from inpatient care to outpatient treatment will boost worker growth in health practitioner offices as well. Nursing and residential care facilities are also expected to have strong growth due to South Dakota's growing elderly population and extended life expectancies.
Waste Management and Remediation Service
The Waste Management and Remediation Services industry in South Dakota is projected to increase by 185 workers (or 23.4 percent) by 2020. Nationally, this subsector is expected to grow 35 percent by 2020. This subsector group is engaged in the collection, treatment, and disposal of waste materials. Growth in this industry is driven by the need for seasonal and temporary workers. Another factor driving the growth of this category is an increasing population and privatization of waste collection services.
Construction of Buildings
The Construction industry in South Dakota is projected to increase worker levels by 1,145 (or 22.1 percent). The 22.1 percent growth is actually much lower than historical patterns due to the recession's toll on the industry in 2009 to 2010. Nationally, the Construction and Extraction industry is projected to grow 22 percent, adding about 1.4 million new jobs over the 2010-2020 period. Job growth will result from increased construction of homes and office buildings, as well as from remodeling projects and the repair and replacement of the nation's infrastructure. Even if the South Dakota and national economies do not experience robust growth in the next 10 years, the continued shifts in county populations from internal migration will keep construction demand up to some degree.
Museums, Historical Sites and Similar Institution
Worker levels in the Museums, Historical Sites and Similar Institutions industry are projected to increase by 100 workers (or 20.4 percent). The growth of this subsector in South Dakota is driven by the retirement of more baby boomers. With the increased retirement rates of the baby boomers, travel and other leisure activities will also increase. This increase will also impact other businesses including casinos, golf courses and amusement establishments.
Wholesale Electronic Markets and Agents and Brokers
The number of Wholesale Electronic Markets and Agents and Brokers is projecting an increase of 280 workers (or 19.7 percent) over the next 10 years in South Dakota. Nationally, according to the BLS, this subsector is expected to see the most growth of the wholesale industry, adding 342,100 new jobs. The Wholesale Trade industry as a whole is nationally projected to add 744,100 jobs (14 percent). Wholesale trade involves businesses providing goods and services to other businesses, not consumers. As long as there is expansion in other industries, there will also be expansion in wholesale trade.
Securities, Commodity Contracts and Other Financial Investments and Related Activities
This subsector of the Finance and Insurance industry is projected to increase by 130 workers (or 18.2 percent) by 2020 in South Dakota. This subsector is primarily engaged in underwriting securities, acting as agents between buyers and sellers of securities and commodities, or providing a securities and commodities exchange service. On a national level, employment in securities, commodity contracts and other financial investments and related activities is expected to expand 25 percent by 2020. Growth is driven by the wide range of financial assets available for trade, the number of baby boomers reaching retirement age and seeking advice on retirement options, and the globalization of securities markets.
Support Activities for Transportation
The worker levels in this subsector are projected to increase by 140 workers (or 17.9 percent) in South
Dakota by 2020. The Support Activities for Transportation subsector services may be provided to transportation carrier establishments or to the general public. Services such as air traffic control, marine cargo handling and motor vehicle towing are included in this subsector. As the economy grows and the demand for goods increases, truck drivers will be needed to transport those goods to businesses and consumers. Employment of laborers and hand, freight, stock and material movers will increase as these workers and support activities increasingly are needed to work in more warehouses because of an expected rise in consumer spending.
Fabricated Metal Product Manufacturing
Fabricated Metal Product Manufacturing is projected to add 585 workers in South Dakota (or 17.0 percent) over the next 10 years. Industries in the Fabricated Metal Product Manufacturing subsector transform metal into intermediate or end products, other than machinery, computers and electronics, and metal furniture or treating metals and metal formed products fabricated elsewhere. South Dakota's business-friendly environment is rated as one of the best in the nation, which helps the expansion of the manufacturing industry and its subsectors. Nationally, overall employment in manufacturing is projected to decline by 1 percent, however, for the Fabricated Metal Products subsector is expected to grow 12 percent, creating 151,600 new jobs.
Computer and Electronic Product Manufacturing
The number of workers in the Computer and Electronic Product Manufacturing subsector is projected to increase by 340 workers (or 15.9 percent) in South Dakota through 2020. The Computer and Electronic Product Manufacturing subsector comprises of establishments that manufacture computers, computer peripherals, communications equipment and similar electronic products. In South Dakota all the categories under the Computer and Electronic Product Manufacturing are projected to grow. Specifically, the Navigational, Measuring, Electromedical, and Control Instruments Manufacturing is projected to increase 49.4 percent. Nationally, this Manufacturing subsector is expected to decline by 14 percent with a loss of 156,800 jobs.
Couriers and Messengers
The Couriers and Messengers subsector of Transportation and Warehousing industry is projecting to add 190 workers (or 15.4 percent) in South Dakota by 2020. This subsector is comprised of providing intercity and/or local delivery of parcels. As the economy is expected to grow through 2020, the demand for goods will increase as well. If the economy continues to see steady growth, the Transportation and Warehousing industries will follow.
|South Dakota Industry Employment Projections 2010 - 2020
Declining & Slowest Growing Industries
|Broadcasting (except Internet)||1,130||1,100||-30||-2.7%|
|Agriculture, Forestry, Fishing and Hunting||33,580||33,470||-110||-0.3%|
|Religious, Grantmaking, Civic, Professional and
|Source: Labor Market Information Center, SD Department of Labor, July 2012|
The industries declining or with a slow growth trend are a result of several factors. Some of the industries that are declining in South Dakota have been due to advances in technology, changes in business practices and other factors. According to the BLS, production occupations are projected to lose 77,300 jobs by 2020 nationally. Also, 11 of the 20 fastest declining occupations are in the production occupational group.
The Private Households subsector falls under the Other Services (except Public Administration) industry. This industry is projecting a decrease of 50 workers (or 7.5 percent) by 2020 in South Dakota. The Private Households subsector includes households that employ workers on or about the premises in activities primarily concerned with the operation of the household. The recession likely impacted the Private Households industry, as some families could no longer afford the luxury of staff to assist with household duties. Another reason for the decline is related to the aging population; as the population ages and children grow up, there is less demand for house maids and helpers. Preliminary findings provided by Mike McCurry, South Dakota state demographer (Rural Life/Census Data Center, Department of Sociology and Rural Studies, South Dakota State University) are projecting a decline in persons ages 5 to 19 through 2020 and ages 55 plus are projected to have the highest levels of growth through 2020 in South Dakota.
The Telecommunications subsector is projected to decrease by 105 workers (or 3.5 percent) over the next 10 years. The Telecommunications subsector is primarily engaged in operating, and/or providing access to facilities for the transmission of voice, data, text, sound and video. The major reason for the decline in South Dakota in this subsector is due to the advancements in technology. As the Telecommunications subsector becomes more technologically advanced and efficient, a smaller workforce is required.
Broadcasting (except Internet)
The worker levels in the Broadcasting (except Internet) subsector are projected to decrease by 30 workers (or 2.7 percent) by 2020. This subsector includes establishments that create content or acquire the right to distribute content and subsequently broadcast the content. Nationally, the trend for this subsector is also on the decline. Much of this trend is attributed to the decrease in circulation caused by the rise of available information on the Internet.
Agriculture, Forestry, Fishing and Hunting
Worker levels in the Agriculture, Forestry, Fishing and Hunting subsector are projected to decrease slightly to 110 workers (or 0.3 percent). This subsector's slight decline through 2020 is mostly attributed to the advancement in technology and needing fewer workers due to more technologically advanced equipment. Another impacting force on this sector is the rising costs of production and consolidation of smaller farms.
The Federal Government subsector in South Dakota is projected to have a slight increase of 80 workers (or 0.7 percent) through 2020. The growth in government employment will be dampened by budgetary constraints and the outsourcing of government jobs to the private sector. Nationally, according to the BLS, federal government employment, including jobs in the Postal Service, is expected to decline by 13 percent. Looking only at postal services in South Dakota, both private and government workers, employment levels are expected to decrease by 155 workers (or 7.2 percent).
The number of workers employed in the Publishing Industries subsector is projected to add 20 workers (or 1.2 percent) in South Dakota. This subsector of the Information industry comprises of establishments engaged in the publishing of newspapers, magazines, other periodicals and books, as well as database and software publishing. The main reason for the slow growth of the Publishing subsector is due to the Internet. The information and availability of content on the Internet causes less demand for newspapers and other published materials. However, the projected growth is more contributed from the Software Publishers and Motion Picture and Video industries.
Religious, Grantmaking, Civic, Professional and Similar Organizations
Worker levels in the Religious, Grantmaking, Civic, Professional and Similar Organizations subsector is projected to slightly increase by 190 workers (2.1 percent). This subsector of Other Services (except Public Administration) is comprised of group establishments that organize and promote religious activities, support various causes through grantmaking, advocate various political and social causes and promote the interest of their members. The slow growth trend in this subsector can be attributed to the economic recovery. In the recovery phase of the recession, there will likely be more individuals to once again donate to charitable and social establishments, which will boost employment in this sector.
Worker levels in the Gasoline Stations subsector are projected to increase by 125 workers (or 2.1 percent) through 2020. The Gasoline Stations subsector is part of the Retail Trade industry. Gasoline stations continue to add more services, such as car washes, gourmet coffees restaurants, and automobile services. This subsector includes establishments retailing automotive fuels and automotive oils and retailing these products in combination with convenience store items. A reason for the expected slow employment growth is likely related to market saturation - there seems to be one on every other corner.
The Truck Transportation subsector falls under the Transportation and Warehousing industry. This subsector is projected to slightly increase by 160 workers (or 3.2 percent) through 2020. The Truck Transportation subsector provides over-the-road transportation of cargo using motor vehicles, such as trucks and tractor tailor. The slow growth of this subsector is related to the continued recovery of the economy and suppressed demand for freight transportation and other goods.
Worker levels in the Food Manufacturing subsector are projected to increase by 260 workers (or 3.4 percent) by 2020. This subsector transforms livestock and agricultural products into products for intermediate or final consumption. South Dakota has a business-friendly environment, including policies and tax structures which are attractive to manufacturers. Although there are a limited number of companies within this subsector, expansion is expected through the year 2020.