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1 0711 %- The number of businesses that closed and their job terminations increased from the previous :: quarter. The slowing economy adversely affected service-type businesses, where job losses =Y from closed businesses rose by 62 percent. Most job terminations occurred among temporary + ; help agencies, building maintenance services, and miscellaneous business services. xv::. Low Mortgage Rates Buoyed Construction Activity ' - (Special Industry Analysis—Construction) Low mortgage rates extended the robust summer construction activity into the fall quarter. Minnesota Among Minnesota's ten major industry sectors, the construction sector again showed the highest rate of new job creation from business expansions. Job losses from business Quarterly Analysis contractions and dissolutions remained at previous quarter's levels. Since the summer of 1994, 62 percent of expansion jobs in construction occurred among 4th Quarter, 1995 special trade contractors that work inside new and renovated buildings. Builders of new residential, industrial, commercial and warehouse structures provided 26 percent of expansion jobs, while highway and heavy construction created 12 percent. Within the special trade group that subcontract with these builders, the fastest growing work opportunities were in plumbing, electrical, masonry and concrete-laying jobs. Small businesses accounted for two out of every three expansion jobs in plumbing and concrete work. During the summer and fall 1995 quarters, more than 70 percent of expansion jobs in special trade construction occurred in the Twin Cities area. Significant job expansions were also evident in the Northeast, Central, and Southeast regions. Expansion jobs in highway construction and building construction were more evenly shared between the Twin Cities area and Greater Minnesota. • Survey of Manufacturers - Third Quarter 1991 through Fourth Quarter 1995 This annual summary of BTS reports provides an opportunity to present detailed information on manufacturing dissolutions that have occurred since the inception of the BTS. Between the third quarter of 1991, through the fourth quarter of 1995 (eighteen quarters), DTED identified 1,073 manufacturing dissolutions that occurred in Minnesota. DTED's follow-up surveys found that of the 1,073 dissolutions, 450 businesses (41.9 percent) cited financial difficulty as the cause for the business dissolution. One hundred and seven businesses (10.0 percent) consolidated operations, while 60 manufacturers (5.6 percent) moved out of Minnesota. The reasons firms provided for moving out of the state have generally remained the same since 1991. The majority of manufacturers moving out of the state cited both burdensome state-imposed taxes and high workers' compensation/unemployment insurance costs as the most significant factors in their decision to move. Good incentives from other states ranked as the next most significant reason for moving to another state. It appeared that high wage costs, inadequate public services, and unsuitable land and facilities were not significant factors in the decision by most manufacturers to move out of the state. i Neighboring states have been the most popular destinations among the manufacturers that have moved: 20 moved to Wisconsin; seven moved to South Dakota; four moved to Iowa; and four moved to North Dakota. The most frequently cited reason for moving to these states was the high cost of workers' compensation in Minnesota. • 5 i