Supply and Demand Conditions for Electricians An Update of Labor Market and Electrician Program Data December 2013 Prepared by: Mohamed Mourssi-Alfash, Ph.D. Research Analyst (651) 259-7416 Mohamed.mourssi@state.mn.us Labor Market Information MN Department of Employment & Economic Development (DEED) In collaboration with: System Office, Academic and Student Affairs Minnesota State Colleges and Universities
Purpose The purpose of this report is to provide a current regional analysis of the labor market for electricians in Minnesota. Background On March 15, 2007, a memo was sent to presidents and chief academic officers at the 13 Minnesota State Colleges and Universities with electrician curriculums that prohibited the addition of new electrician programs and directed that fiscal 2008 enrollment be limited to the fiscal 2007 level. This decision was based primarily on an analysis of statewide labor market data on electricians, including trends in electrical contractor employment, Unemployment Insurance (UI) claims, long-term occupational employment projections, job vacancies, and the number of electrician program completers from all Minnesota post-secondary institutions. Subsequently, in April 2007, regional estimates of the supply/demand conditions for electricians were produced. The March 15, 2007, memo indicated that the decision to cap electrician enrollment would be reassessed in October of subsequent years using both internal and external inputs. This report references labor market activity through the first half of 2013. In testimony before legislative committees during 2007 and 2008, the International Brotherhood of Electrical Workers Local 292 questioned whether, during a time of high unemployment, the Minnesota State Colleges and Universities system (MnSCU) should continue enrolling students in electrician programs at the same pace as in previous years. Interested by this and broader questions, the Legislative Audit Commission directed the Office of the Legislative Auditor to evaluate MnSCU s occupational programs. In March 2009 the Office of the Legislative Auditor s Program Evaluation Division issued a report titled: MnSCU Occupational Programs. The report, which studied all occupational programs, recommended When reviewing its cap on enrollments for construction electrician programs, MnSCU s Office of the Chancellor should take local economic conditions into greater account. In response to this recommendation, annual studies of the electricians labor market has been analyzed by planning region rather than just statewide, as had been the prior practice. Following an executive summary, this report presents regional information on demand, supply, wages, and net supply-demand. Enrollment and Graduate Data Sources Beginning with the December 2011 report, the source for annual enrollment and program graduate data has changed. Previously, colleges were asked to provide these data. Now, this report reflects data acquired from the system warehouse for current and prior years. Colleges base enrollment caps, as listed in the table below, remain unchanged. These enrollment caps reflect program enrollment levels reported by colleges for fall 2006. 1
Electrician Program Enrollment Fall '06 College Enrollment Cap Anoka 149 Dakota County 74 Hibbing 77 Lake Superior 50 Minneapolis 53 Minnesota State 204 Minnesota West 87 Northland 71 Northwest 57 Ridgewater 55 Riverland 87 Saint Cloud 123 Saint Paul 104 Total 1,191 Fall '06 Region Enrollment Cap Northwest 332 Northeast 127 Central 178 Twin Cities 380 Southwest 87 Southeast 87 Total 1,191 2
EXECUTIVE SUMMARY Overall, statewide indicators show that the recovery from the 2007 to 2009 Great Recession continues to impact the labor market for electricians. While employment levels remain well below their pre-recession peak, our analysis of supply and demand indicates a slight shortage of electricians in the Twin Cities and Central Minnesota regions. Other regions in Greater Minnesota have shown somewhat uneven recovery. DEMAND Employment in the construction industry, where most electricians are employed, is up by 11,570 jobs or 11.1 percent from a year ago (Table 1.1, page 6), and short-term industry employment is projected to improve into the first half of 2014. Over the next 10 years, the number of employed electricians is projected to grow by 3,558, or 35 percent. An additional 2,700 openings will result from replacement needs. (Table 3, page 13) SUPPLY The number of people receiving unemployment insurance benefits in October 2013 was 512, down by 74 or 12.6 percent from a year earlier (Chart 5, page 14), which is a continuation of the decline in UI claims since mid-2010. The number of graduates from Minnesota electrician programs, at 266 in 2013, was down by 76 from the 2011 academic year (Table 4, page 16). Minnesota electrician program enrollment in the fall of 2013 was 822, a decrease of 46, or about 5.3 percent, from 2011 academic year s level, but a slight increase of 9, or about 1.1 percent, from 2012 academic year s enrollment level. (Table 6, page 18) Wage trends for electricians in 2012 rose faster than wages economy wide indicating a better labor market for electrician contractor employees than many other industries. (Chart 8, page 20 and Chart 9, page 21) Graduate Follow-up Survey data showed increases in related-employment rates in 2012. Five out of the six planning regions showed higher related-employment rates than the previous year. The Twin Cities employment rate increased by 11.6 percentage points. Central was the only region in Greater Minnesota that showed the same relatedemployment rate in both years. (Table 7, page 22) SUPPLY-DEMAND COMPARISON In 2013, Minnesota had an overall shortage of 168 electricians for the first time since the recession based on a supply-demand comparison that uses the most recent job projections, job vacancy survey, UI, and 2013 program graduate data. (Table 8, page 24) 3
Labor market and economic indicators point to an improved market for electricians over the next five years. The next several years will likely see a turning point in the supply and demand ratio for electricians. Data indicate that the degree of this turnaround varies between regions in Greater Minnesota. The number of apprenticeships offered by the Department of Industry and Labor has increased to a record high of 747 in 2013 leading to a possible spike in the supply of electricians in 2014. ENROLLMENT CAPS Based on an analysis of regional supply and demand conditions for electricians, enrollment caps were issued for colleges that have electrician programs. These caps have remained in effect for all colleges except for Minnesota West Community and Technical College, whose enrollment cap was lifted in a June 4, 2009, memo and reinstated in a November 4, 2009, memo. Based on this report, enrollment caps should be reconsidered. Changes, if any, would be communicated to colleges. 4
DEMAND Industry Employment Trends In Minnesota, approximately 80 percent of all electricians are employed in the construction industry. 1 Based on national staffing patterns 93 percent of electricians are employed by electrical contractor firms. 2 Chart 1 below shows the seasonally adjusted employment trend in statewide construction industry employment. The total number of construction industry jobs in Minnesota grew until about February 2006. The total number of construction jobs in October 2013 was 98,000. This was down 34,000, or 25.8 percent, from the high reached in February 2006, but up by a seasonally adjusted 4,000 jobs, or 4.3 percent, from October 2012. 3 A more detailed breakdown of construction industry employment trends is not available on a seasonally adjusted basis. Instead, Table 1.1 shows the comparison of employment to the same month a year earlier. It should be noted that electrical contractors are found in the building equipment contractors industry. In October 2013, the construction industry added jobs year-over-year for the third year in a row after more than five years of year-over-year job losses. As Table 1.1 shows, the industry expanded by 11,570 jobs, an over-the-year growth rate of 11.1 percent. Job growth was led by the construction of buildings sector. Employment in the residential building construction subsector has increased by 10.9 percent. Related to the increase in residential building jobs is 1 Minnesota Department of Employment and Economic Development (DEED), Labor Market Information Office, Occupational Employment Statistics (OES), www.positivelyminnesota.com/oes 2 Bureau of Labor Statistics (BLS), OES, www.bls.gov/oes 3 DEED, Labor Market Information Office, Current Employment Statistics (CES), www.positivelyminnesota.com/ces 5
the employment gain in foundation, structure and building exterior contractors; the specialty trade subcontractors involved in the first phases of the building project added 941 jobs, or 7.3 percent, from a year ago. The heavy and civil engineering sector added 1,546 jobs over the year, showing an employment gain of 9.2 percent. Table 1.1: Construction Industry Adds Jobs Over the Year in Minnesota (DATA ARE NOT SEASONALLY ADJUSTED) Change from Year Ago Industry October 2013 October 2012 Number Percent Construction 115,521 103,951 11,570 11.1% Construction of Buildings 24,782 22,772 2,010 8.8% Residential Building 11,013 9,928 1,085 10.9% Heavy & Civil Engineering Construction 18,318 16,772 1,546 9.2% Specialty Trade Contractors 72,421 64,407 8,014 12.4% Foundation, Structure & Building Exterior 13,744 12,803 941 7.3% Building Equipment Contractors 29,962 28,091 1,871 6.7% Source: DEED, Labor Market Information, Current Employment Statistics 6
As shown in table 1.2, during the third quarter of 2013 the number of housing units authorized by building permits in Minnesota was 28.4 percent above the number authorized during the third quarter of 2012; and it is 133.98 percent above the number of permits authorized during the third quarter of 2011. 4 This brings the number of authorized units in third quarter 2013 to twice the level in third quarter 2009 for the first time since the recession. The Quarterly Census of Employment and Wages is based on employer-submitted payroll employment and wages for the Minnesota Unemployment Insurance Tax. It provides the most detailed breakdown of industry employment by industry category and geographic region. However, there is a six-month lag in time from the end of the quarter for which employment is reported and when it becomes available. 4 U.S. Census Bureau, Housing Units Authorized by Building Permits, www.census.gov/construction/bps 7
Chart 2 shows that while total specialty trades construction industry employment grew from 2001 through mid-2006, electrical contractor employment fell. The demand for nonresidential electrical contracting work weakened after 2001, leveled off from 2004 to 2007, but dropped sharply again from 2008 through 2010. The slowdown in residential construction has had a pronounced impact on residential electrical contracting employment since 2005. However, employment in most sectors began to level off in 2010 and expand slightly in 2011 with continued expansion in 2012 and 2013. 8
Chart 3 shows that the Twin Cities region had 61 percent (or 6,974 of 11,423) of the total electrical contractor industry workforce in Minnesota in 2012. Over 75 percent of the state s decrease in employment level in the electrical contractor industry since 2001 occurred in the Twin Cities region, a decline of 3,768 jobs, or 35.0 percent in 2012 compared to the Twin Cities peak employment level in 2001. Regions in Greater Minnesota have experienced different levels of change over the 2011 to 2012 period. Two regions experienced employment decreases: 0.4 percent in the Southeast and 11.7 percent in the Northeast region. Numerically, the decrease in employment levels ranges from 4 in the Southeast region to 72 in the Northeast region. 5 The electrical contractor industry began to turn around in 2011 with over-the-year employment growth statewide in 2011 and 2012. Five out of six regions saw over-the-year job growth in this industry in 2011, and four out of six regions saw over-the-year job growth in 2012: Twin Cities, Northwest, Southwest and Central Minnesota. Third quarter 2013 data indicate that employment levels continue to grow, with five out of six regions showing growth. NOTE: fix chart 3 to include data for 2005 and 2006 (or explain why it is missing). I assume we had this data last year. 5 DEED, Labor Market Information, Quarterly Census of Employment and Wages (QCEW), www.positivelyminnesota.com/qcew 9
Chart 3: Employment in Electrical Contractor Industry: 2001 to 2012 18,000 16,000 14,000 12,000 Employment 10,000 8,000 6,000 4,000 2,000 0 Minnesota Central Northeast Northwest Twin Cities Southeast Southwest 2001 16,407 1,426 642 1,071 10,742 1,437 838 2002 15,785 1,480 634 1,141 9,941 1,478 848 2003 15,469 1,498 644 1,267 9,427 1,375 845 2004 15,373 1,524 657 1,246 9,357 1,284 859 2005 15,046 1,500 2006 14,596 1,489 2007 14,331 1,414 711 1,091 8,507 1,320 785 2008 13,319 1,298 769 1,011 7,816 1,200 753 2009 11,557 1,163 696 913 6,606 1,079 711 2010 10,175 1,125 623 853 5,882 1,008 684 2011 10,805 1,193 614 874 6,382 1,050 692 2012 11,423 1,261 542 894 6,974 1,046 706 Source: DEED, Labor Market Information, QCEW 10
Job Vacancies Twice each year the Department of Employment and Economic Development s Labor Market Information Office (DEED-LMI) conducts a survey of job openings in Minnesota. Chart 4 shows that the statewide number of vacancies for electricians during the second quarter of 2013 increased to 139, more than twice the number of job vacancies reported in the same quarter in the previous year (54). The job-vacancy rate for electricians in the second quarter of 2013 was estimated to be 1.4 percent, or 1.4 job openings for every 100 electrician positions in the state. This was a much improved job vacancy rate compared with a year earlier (0.5) and was about half the overall job vacancy rate for the major construction and extraction occupational group (3.0 percent), and the overall job vacancy rate (2.8 percent). 6 6 DEED, Labor Market Information, Job Vacancy Survey (JVS), www.positivelyminnesota.com/jvs 11
Short-term Projections Short-term industry and occupation employment projections are produced quarterly by DEED- LMI. The most recent figures available are shown in Table 2 below. The number of employed electricians is projected to grow by 622, or 5.6 percent, over the next year. Additionally, electricians will be needed to take jobs left vacant as individuals retire or otherwise leave the profession. An additional 203 electrician openings will result from projected replacement openings. 7 Table 2: Short-Term Projected Electrician Job Openings Occupation Estimated Employment, 4Q 2013 Projected Employment, 4Q 2014 Percent Change 4Q 2013 to 4Q 2014 Projections Numeric Change Replacement Openings* Total Openings** Total, All Occupations 2,817,941 2,860,073 1.50% 42,132 65,901 108,435 Construction and Extraction 89,492 94,435 5.50% 4,943 1,431 6,375 Electricians 11,057 11,679 5.63% 622 203 825 *Replacement Openings: Net replacement openings are an estimate of the need for new work force entrants to replace workers who leave an occupation. It estimates the net movement of the following: 1) experienced workers who leave an occupation and start working in another occupation, stop working altogether, or leave the geographic area, minus 2) experienced workers who move into such an opening. It thus does not represent the total number of jobs to be filled due to the need to replace workers. ** Total Openings: Total job openings represent the sum of employment increases and net replacements. If employment change is negative, job openings due to growth are zero and total job openings equals net replacements. Source: DEED, Labor Market Information, Employment Projections 7 DEED, Labor Market Information Office, Employment Projections, www.positivelyminnesota.com/eo 12
Long-term Projections Table 3 shows the electrician employment and job openings projections for Minnesota and the six planning regions for 2010-2020 from DEED-LMI long-term projections. According to Table 3, there is a projected average annual demand of 626 electrician job openings each year from 2010 to 2020 in Minnesota. Job openings in the seven-county Twin Cities region are projected to account for 2,970, or 47.4 percent, of the total annual openings for electricians in Minnesota. Net replacement demand, including retirements, is also a big part of the long-term projections figures. For Minnesota, about 43.1 of every 100 projected openings are due to replacement demand. Table 3: 2010 to 2020 Long-Term Employment Projections for Electricians 2010-2020 Estimated Employment, 2010 Projected Employment, 2020 Total Openings ** Avg. Ann Total Openings Area/ Region Percent Change Numeric Change Replacement Openings* Minnesota 10,033 13,591 35.50% 3,558 2,700 6,260 626 Northwest 975 1,332 36.60% 357 260 620 62 Northeast 1,020 1,195 17.20% 175 280 460 46 Central 1,309 1,902 45.30% 593 350 940 94 Twin Cities 4,732 6,426 35.80% 1,694 1,280 2,970 297 Southwest 742 983 32.50% 241 200 440 44 Southeast 1,116 1,553 39.20% 437 300 740 74 * Please refer to the definitions found with Table 2. Source: DEED, Labor Market Information, Employment Projections 13
SUPPLY Trends in Unemployment Monthly data on electricians who have been receiving UI benefits provide the best available information on the number of unemployed electricians, both union and non-union members. However, it will not capture all of the unemployed because of eligibility requirements and the fact that some individuals may have exhausted benefits. The chart below shows the comparable trend for only those individuals receiving regular UI benefits over the past seven years. It does not include an additional number of unemployed workers who received federal emergency unemployment compensation (EUC) benefits. The EUC benefits were first paid in July 2008 and have been extended several times since then. The impact of the 2007-09 recession on top of the earlier slowdown in residential construction is dramatically reflected in the increase in UI claims beginning in the fourth quarter of 2007 and accelerating in 2009. As shown in Chart 5, the number of people receiving UI in October 2013 was 512, down by 74, or 12.6 percent, from a year earlier. The 12-month moving average in October 2013 was 745, down by 124, or 14.3 percent, from a year earlier. 8 Recent numbers of UI recipients have declined to pre-recessionary levels. It should be noted that the number of electricians who exhausted their UI benefits reached a peak of 1,732 in calendar year 2010. 8 DEED, Labor Market Information, Unemployment Insurance 14
Chart 6 shows the 12-month moving average of electrician UI claimants by the six sub-state planning regions. The increase in claims during the 2007-2009 recession was felt by all regions of the state. Declines in the 12-month moving average of electrician UI claimants began to decline in mid-2010. While having smaller numerical declines in 2013, unemployment has declined most rapidly in the Central region (down 27 claims, or 16.0 percent) and in the Southeast region (down 20 claims, or 15.6 percent). 15
Program Graduates The number of students completing electrician programs in Minnesota in 2013 was 76 less than in 2011, a decline of 22.2 percent, and was down 18 graduates from 2012, a decline of 6.3 percent. There were small regional variations in the number of electrician program graduates in Greater Minnesota. The sharpest relative drop occurred in the Twin Cities region, which had 32 fewer graduates in 2013 compared with the 2011 academic year. Programs in the Northwest region registered 31 fewer graduates, Northeast six fewer graduates, Southeast five fewer, and Central, five fewer. One region Southwest registered three more graduates in 2013 than in 2011. Table 4: Electrician Program Graduates: 2011 and 2013 Graduates Change 2012 to 2013 Change 2011 to 2013 Institution 2011 2012 2013 Number Percent Number Percent Anoka 23 10 15 5 50.0% -8-34.8% Dakota County 15 21 18-3 -14.3% 3 20.0% Dunwoody* 47 21 17-4 -19.0% -30-63.8% Hibbing 19 22 22 0 0.0% 3 15.8% Lake Superior 24 12 15 3 25.0% -9-37.5% Minneapolis 6 9 7-2 -22.2% 1 16.7% Minnesota State 47 43 34-9 -20.9% -13-27.7% Minnesota West 21 23 24 1 4.3% 3 14.3% Northland 22 15 14-1 -6.7% -8-36.4% Northwest 22 10 12 2 20.0% -10-45.5% Ridgewater 19 20 18-2 -10.0% -1-5.3% Riverland 19 18 14-4 -22.2% -5-26.3% Saint Cloud 33 34 29-5 -14.7% -4-12.1% Saint Paul 25 26 27 1 3.8% 2 8.0% TOTAL 342 284 266-18 -6.3% -76-22.2% Graduates Change 2012 to 2013 Change 2011 to 2013 REGION 2011 2012 2013 Number Percent Number Percent Northwest 91 68 60-8 -11.8% -31-34.1% Northeast 43 34 37 3 8.8% -6-14.0% Central 52 54 47-7 -13.0% -5-9.6% Twin Cities Metro 116 87 84-3 -3.4% -32-27.6% Southwest 21 23 24 1 4.3% 3 14.3% Southeast 19 18 14-4 -22.2% -5-26.3% TOTAL 342 284 266-18 -6.3% -76-22.2% Source: System Office Research, Planning and Policy *Data provided by Dunwoody. Apprenticeship Completers 16
Another source of supply for the occupation is formal apprenticeship programs. As Table 5 shows, the number of electricians completing apprenticeships increased steadily from 2010 to 2012 from 123 to 190. It then jumped up to its highest level on record with 747 completers. This level represents a threefold increase over a year earlier adding a significant boost to the overall supply of electricians. Table 5: Apprenticeship Completers Up in 2013 Apprenticeship Occupation Fiscal Year Construction Electrician Maintenance Electrician TOTAL 2002 151 9 160 2003 295 10 305 2004 204 4 208 2005 284 1 284 2006 208 0 208 2007 116 0 116 2008 136 2 138 2009 158 7 165 2010 114 9 123 2011 132 17 149 2012 178 12 190 2013 732 15 747 Source: Minnesota Department of Labor and Industry 17
Program Enrollment As shown in Table 6, the number of students enrolled in electrician programs was down by 46, or 5.3 percent, in the fall of 2013 compared with 2011, but was up 9, or 1.1 percent, from 2012. Table 6: Total Enrollment in Electrician Programs Declined by Five Percent from 2011 Change 2012 to Total Enrollment 2013 Change 2011 to 2013 INSTITUTION Fall 2011 Fall 2012 Fall 2013 Number Percent Number Percent Anoka 46 45 47 2 4.4% 1 2.2% Dakota County 80 71 73 2 2.8% -7-8.8% Dunwoody* 38 41 44 3 7.3% 6 15.8% Hibbing 54 56 53-3 -5.4% -1-1.9% Lake Superior 80 65 74 9 13.8% -6-7.5% Minneapolis 69 58 68 10 17.2% -1-1.4% Minnesota State 116 100 103 3 3.0% -13-11.2% Minnesota West 63 60 53-7 -11.7% -10-15.9% Northland 48 48 44-4 -8.3% -4-8.3% Northwest 29 30 32 2 6.7% 3 10.3% Ridgewater 47 47 48 1 2.1% 1 2.1% Riverland 41 36 28-8 -22.2% -13-31.7% St. Cloud 75 70 81 11 15.7% 6 8.0% Saint Paul 82 86 74-12 -14.0% -8-9.8% TOTAL 868 813 822 9 1.1% -46-5.3% Total Enrollment Change 2012 to 2013 Change 2011 to 2013 REGION Fall 2011 Fall 2012 Fall 2013 Number Percent Number Percent Northwest 193 178 179 1 0.6% -14-7.3% Northeast 134 121 127 6 5.0% -7-5.2% Central 122 117 129 12 10.3% 7 5.7% Twin Cities 315 301 306 5 1.7% -9-2.9% Southwest 63 60 53-7 -11.7% -10-15.9% Southeast 41 36 28-8 -22.2% -13-31.7% TOTAL 868 813 822 9 1.1% -46-5.3% *Data provided by Dunwoody. Data displayed include the number of unique students with one or more declared majors in programs with a CIP Code of 46.0302. Source: System Office Research, Planning and Policy Note: These tables reflect some minor corrections to the numbers of graduates and enrollment levels published in previous reports. 18
Chart 7 displays the trend in electrician program enrollment at the 13 colleges in the Minnesota State Colleges and Universities System and Dunwoody College over the past eight years. The data show that the overall trend has been down although the number rose in Fall 2013 by nine. 19
WAGES Another way to determine whether there is a shortage or surplus of workers is to track change in wages and compare that to the total economy. If there is a shortage, the wage level should increase at a faster than average rate to attract workers to move to the area or to persuade them to enter the field. If there is not a shortage, wage levels will increase at a slower than average rate or even decline. Chart 8 shows both non-inflation-adjusted average weekly wages (actual) and inflation-adjusted (real) average weekly wages. The 2012 actual average weekly wage level for electricians in Minnesota, $1,146.00, is considerably higher than the average weekly wage for all occupations, $949.00. Actual wages in the electrical contractor industry grew 8.5 percent between 2010 and 2012 with more than half of that growth in the second year. This compares to 5.6 percent growth economy wide over the two year period. Moreover, at 12.0 percent wage gains in electrical contracts between 2007 and 2012 have now exceeded economy wide wage gains of 11.1 percent over the same period. Overall, this indicates possible upward wage pressure and a tightening labor market in the electrical field. 20
Chart 9 below compares actual average weekly wages paid to all workers in the electrical contractor industry statewide and in six planning regions. Five out of six regions experienced an increase in actual wages in 2012 compared to the prior year, ranging from 2.8 percent to 13.0 percent. Twin Cities wages, after showing declines over two consecutive years, 2009 and 2010, grew in 2011, up $50.00, or 4.1 percent, and $36, or 2.8 percent, in 2012. Southeast was the only region showing a slight decrease in actual wages in 2012, by $8.00, or 0.9 percent. Actual wages in the northeast region showed the greatest gain over the 2007 to 2010 period, increasing by almost 16 percent, with continued growth, up 13.0 percent, or $138.00, from 2011 to 2012. Southwest showed the second-largest gain in actual average weekly wages with a 5.1 percent growth, or $37, from 2011 to 2012. 21
Related-Employment Rate Data collected from the Minnesota State Colleges and Universities Graduate Follow-up Survey provides another indicator of the supply and demand conditions for electricians. Table 7 on the following page generally reaffirms other data presented throughout this report that show that labor market conditions continue to improve for electricians. The statewide relatedemployment rate increased from a low of 62.1 percent in 2009 to 81.7 percent in 2010, to 85.5 percent in 2011 and to 91.5 percent in 2012. The MnSCU data also show that employment rates in Greater Minnesota are higher than in the Twin Cities, as the average rate for graduates from programs in Greater Minnesota, 92.4 percent, was about 9.0 percentage points higher than the rate for Twin Cities graduates, 83.7 percent. In 2012, the overall related-employment rate improved at three of the four Twin Cities programs, while it declined at one program. The related employment rates for programs at Anoka Technical College (100.0 percent), Dakota County Technical College (66.7 percent), and St. Paul College (100.0 percent) were noticeably higher in 2012 than in 2011, while the program in Minneapolis Community and Technical College showed a decline of 5.0 percentage points to 75 percent. While the 2012 Greater Minnesota program graduates generally fared better than they did a year earlier, this improvement was not shared by all graduates. For example, 2012 graduates of electrician programs in Lake Superior, Minnesota State and St Cloud had a somewhat harder time finding employment compared to 2011 graduates. In addition, related-employment rates for one of the two Northeast region programs (Lake Superior) slightly declined by 1.1 percent in 2012, while Hibbing showed an increase from 70.6 percent to 75.0 percent. This means that the job market for graduates in the Northeast has significantly improved since the recession but remains challenging and is unstable. The related-employment rate for 2012 graduates from Minnesota West College jumped from 83.3 percent to 95.2 percent. Electrician graduates from Riverland fared better with the related-employment rate up from 80.0 percent in 2011 to 92.3 percent in 2012. The related-employment rate for 2012 graduates of the three programs in the Northwest region (Minnesota State, Northland and Northwest) was 98.0 percent, an 8.4 percentage point increase over the previous year s rate of 89.6 percent. 22
Table 7: 2012 Related Employment Rate Confirms Improved, but Unstable, Hiring Conditions in Twin Cities and Greater Minnesota Awards Related Employment Rate Institution 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Anoka 55 41 45 24 23 10 68.6% 80.0% 33.3% 56.3% 78.9% 100.0% Dakota County 17 29 21 29 15 23 60.0% 88.9% 50.0% 85.7% 57.1% 66.7% Hibbing 34 32 23 21 19 22 66.7% 25.0% 36.8% 70.6% 70.6% 75.0% Lake Superior 19 25 26 16 25 12 80.0% 52.9% 33.3% 100.0% 90.0% 88.9% Minneapolis 12 17 7 8 6 9 85.7% 70.0% 42.9% 83.3% 80.0% 75.0% Minnesota State 65 79 63 53 47 43 96.6% 92.1% 83.9% 91.5% 97.4% 93.9% Minnesota West 31 33 17 22 21 23 90.0% 93.3% 73.3% 95.0% 83.3% 95.2% Northland 27 31 26 25 22 15 100.0% 95.0% 55.6% 60.0% 88.9% 100.0% Northwest 12 21 14 19 22 10 100.0% 76.9% 100.0% 60.0% 82.4% 100.0% Ridgewater 24 20 22 21 19 20 100.0% 92.3% 100.0% 100.0% 92.9% 100.0% Riverland 43 31 35 15 19 18 72.5% 88.9% 52.4% 70.0% 80.0% 92.3% Saint Cloud 44 55 49 39 33 34 97.6% 86.0% 79.3% 95.5% 100.0% 96.0% Saint Paul 35 54 43 32 25 26 44.8% 47.7% 45.5% 68.4% 66.7% 100.0% Total 418 468 391 324 296 265 81.8% 76.9% 62.1% 81.7% 85.5% 91.5% Awards Related Employment Rate Planning Region 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Northwest 104 131 103 97 91 68 97.6% 90.8% 79.3% 82.1% 92.3% 96.2% Northeast 53 57 49 37 44 34 70.6% 36.6% 36.0% 79.2% 77.8% 81.0% Central 68 75 71 60 52 54 98.4% 87.5% 86.4% 96.9% 97.4% 97.4% Twin Cities 119 141 116 93 69 68 62.0% 64.5% 41.2% 70.9% 72.1% 83.7% Southwest 31 33 17 22 21 23 90.0% 93.3% 73.3% 95.0% 83.3% 95.2% Southeast 43 31 35 15 19 18 72.5% 88.9% 52.4% 70.0% 80.0% 92.3% Total 418 468 391 324 296 265 81.8% 76.9% 62.1% 81.7% 85.5% 91.5% Data for Electrician Program CIP 46.0302 Source: MnSCU, Graduate Follow-Up Survey 2/5/2014 23
SUPPLY-DEMAND COMPARISON The initial study of supply/demand conditions for electricians done in the spring of 2007 showed an estimated surplus of 575 electricians. The report released in October 2007 estimated the surplus at 428; a surplus of over 1,400 electricians in 2009; a surplus of 660 in 2010; a surplus of 450 in 2011, and a surplus of 36 in 2012. In line with the overall improvement in the economy and the labor market for electricians, Table 8 below shows a shortage of 168 electricians in the state for the first time since the recession, based on the supply-demand comparison using the most recent employment projections 9, job vacancy survey data, UI data, and 2012 program graduate data collected via a survey of colleges. The overall shortage in 2013 followed the dramatic decline in the surplus in all regions in 2012; however, there has been a variation in the degree of surplus/shortage from one region to another as five out of six regions in Greater Minnesota showed surplus, while the Twin Cities showed a shortage of 403 in addition to a small shortage in Central Minnesota of five. The Northwest region has the largest estimated surplus, at 213, compared to a surplus of 16 reported last year, and the highest ratio of supply to demand, at 3.6. The Southwest region s estimate shows a surplus of 13, after showing a shortage of 49 last year. The Northeast region s estimate shows the smallest numeric surplus at 3. The surplus in the Northeast, Southwest, and Southeast regions have similar ratio of supply to demand, ranging from 1.0 to 1.3. Table 8: The Estimated Surplus/Shortage of Electricians in 2013 Demand Supply 2010-2020 Region 2010 Estimated Employment Average Total Openings Due to Growth and Replacement plus Vacancies Region's 2013 Electrical Program Graduates 2013 Graduates Adjusted for Migration* Adjusted Unemployed** Total Supply*** Demand Minnesota 10,033 734 266 232 334 566-168 0.8 Northwest 975 82 60 33 262 295 213 3.6 Northeast 1,020 51 37 23 31 54 3 1.0 Central 1,309 99 47 42 52 94-5 0.9 Twin Cities 4,732 357 84 101-147 -46-403 -0.1 Southwest 742 56 24 23 46 69 13 1.2 Southeast 1,116 80 14 11 96 107 27 1.3 * 2012 electrician program graduates adjusted by FY1998-FY2004 regional average percentages working in Minnesota and relocating to other regions within the state. Some graduates work outside of Minnesota. ** The number of unemployed electricians in excess of a 4% unemployment rate for electricians in each region. This is calculated by multiplying the estimated regional electrician employment by.04 and subtracting that number from the 12-month moving average number of electricians receiving Unemployment Insurance. *** 2012 electrician program graduates plus adjusted unemployed. Difference Between Total Supply and Estimated Annual Total Supply per Opening 9 Demand is measured by taking the annual average openings projected between 2010 and 2020 and adding the number of current Minnesota job vacancies, which have been distributed across regions based on regional employment concentrations as electrician job vacancies are not available for all regions. 24
SUMMARY This paper has reviewed available labor market indicators of supply and demand for electricians in Minnesota and its sub-state regions as of the third quarter of 2013. Data presented in the report show that electricians employment conditions are improving and that this trend is likely to continue. However, labor market conditions for electricians are not yet back to their prerecession levels. Employment levels are still well below their pre-recession peak in both the Twin Cities and Greater Minnesota as the economy continues to recover from the housing bubble and construction related Great Recession of 2007 to 2009. The economic recovery has also improved the employment prospects for electricians as surplus has steadily shifted toward shortage. Employment rates for electrician graduates from Minnesota state colleges improved enormously in 2010, 2011 and 2012, but there is still a fair number of recent graduates who have not found work in four out of six planning areas in the state. Data about 2013 employment rates are not available yet. Short-term employment projections for electricians indicate steady over-the-year growth of 5.6 percent into the second quarter of 2014. However, 2014 may experience a spike in the supply of electricians as the number of apprenticeships for construction and maintenance electricians has increased to a record high of 747. On the supply side, UI claims continue to fall, which may be a sign of improving conditions. However, the number of electricians who exhausted UI benefits peaked at over 1,730 in calendar year 2010. The number of students enrolled in electrician programs continues to contract in response to demand, and the number of graduates is likely to decline again in spring 2014. Wage growth has improved over the last two years. At 8.5 percent, electrical contractor wages have increased faster than wages economy wide in Minnesota which grew only 5.6 percent over the same period. 25