A “tenuous” economic recovery for Duluth?

This recent "commentary" from Wells Fargo touted the ongoing economic recovery in Minnesota.

But for Duluth, it predicted the city's recovery from the economic recession "will remain relatively tenuous."

As evidence, the report's authors cited employment growth, which it said trails the state and the nation.

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The report's conclusion runs counter to recent signs of optimism in Duluth, including plans for a new corporate tower to house the expanding clothing retailer Maurice's, the announcement by the aerospace company AAR last year to re-open a long-closed jet maintenance facility at the Duluth airport, and Cirrus Aircraft's ongoing ramp-up to produce its long anticipated Vision personal jet.

Duluth Mayor Don Ness doesn't put much stock in the Wells Fargo report, largely because it bases its conclusions on data from the entire Duluth metropolitan statistical area (MSA), which includes all of Carlton and St. Louis Counties, as well as Douglas County in Wisconsin. That's an area nearly 200 miles from its southern border to the Canadian border.

"There are almost three separate economies at play throughout the MSA," said Ness. "That gives a skewed picture of what's happening in our region."

For example, the unemployment rate in Hibbing is 8.6 percent. For the MSA as a whole, it's 6.6 percent. For the city of Duluth, it's only 5.9 percent. "Which isn't that bad," said Jan Saxhaug, Regional Labor Market Analyst for the state's Department of Employment and Economic Development (DEED). That's only 0.7 percent behind the state, and well ahead of the national average.

But, Saxhaug points out that Duluth's employment growth has remained stagnant since 2009, whereas the state has added jobs.

The key could be population growth, or lack thereof.

"That's the big glaring issue with Duluth," said Wells Fargo Economist Mike Wolf. The city's population has hovered just over 86,000 people since 2010, while the national growth rate is around 0.7 percent annually, according to Wolf.

Duluth's Don Ness has aggressively touted his "90 x 20" goal, to raise the city's population to 90,000 by the year 2020.

To accomplish that goal, Ness says Duluth needs to continue to create professional jobs that support working families, bolster its housing supply for new workers, and convince retiring baby boomers not to flock to Florida or Arizona, but to stay in town.

"I'm still very confident in our ability to becoming a growing community," he said. "The momentum is on our side."

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