Major Industries and Commercial Activity
Manufacturing is the primary industry in Minneapolis's diversified economic base. Principal manufacturing areas are electronics, milling, machinery, medical products, food processing, and graphic arts. Sixteen of the Fortune 500 largest U.S. corporations are headquartered in the Twin Cities, which is among the largest commercial centers between Chicago and the West Coast. The area is also home to 30 Fortune 1000 companies and several of the world's largest private companies.
Also integral to the local economy are high-technology industries. With the University of Minnesota and other colleges and technical schools providing applied research and well-trained scientists and engineers, one of the largest concentrations of high-technology firms in the nation—more than 1,300—developed in metropolitan Minneapolis-Saint Paul.
Among the banks and other financial institutions that make the Twin Cities the financial center of the upper Midwest, seven of the largest are based in Minneapolis. In addition, the headquarters of the Ninth Federal Reserve District Bank is located in the city. Local banks, savings and loan companies, venture capital concerns, and insurance companies play a major role in the economic development of the region.
Items and goods produced: electronics, food and dairy products, super computers, structural steel, thermostatic controls, conveyor systems, medical electronics equipment, farm machinery, ball bearings, tools, construction machinery, boilers, tanks, burglar alarms, underwear and hosiery, packaging, garden tools, lawn mowers, sprinklers
Incentive Programs—New and Existing Companies
The Twin Cities area offers a variety of programs for new and expanding businesses.
The Minneapolis Community Development Agency (MCDA), the development arm of the City of Minneapolis, provides a host of affordable financing packages and site-search assistance for businesses expanding in or relocating to Minneapolis. As an authorized agent for the federal Small Business Administration, the MCDA can combine federal small business financing with Minneapolis' own unique finance tools to help companies grow. MCDA business experts help businesses realize their goals from preliminary negotiations to closing. BusinessLink is a one-stop business service center located at the MCDA.
State business tax incentives include research and development credits, foreign income deductions, and sales tax exemptions and reductions. In addition the state of Minnesota offers, through a network of five job-training programs, assistance to businesses in locating and training employees.
Job training programs
The Minneapolis Employment and Training Program (METP), a service of the City of Minneapolis, offers a variety of training and job placement services for youth, adult, and mature workers as well as dislocated and welfare workers.
Fueling the local economy is the redevelopment of downtown Minneapolis. Since the expansion of the now-famous Nicollet Mall in the 1980s and the initiation of the innovative skyway system, billions of dollars have been invested in construction projects. The Franklin-Portland Gateway is a phased multi-use development; the first phase was completed in April 2004 and included rental and ownership residential units as well as the four-story community and education Children's Village Center. Future phases will add an additional 65 rental units, 13 ownership units, and 14,000 square feet of commercial-use space. Nearly $10 million of city-assisted financing have made the Augustana Chapel View Homes a reality; Minneapolis seniors are welcomed home in this rental and nursing facility. The Boulevard is a mixed-use affordable living center with more than 60,000 square feet of community space. In 2006 a new Central Minneapolis Public Library will open in downtown Minneapolis. Voters approved spending $110 million to build the main library; an additional $30 million will aid community improvements at the library's 14 branches.
Economic expansion and construction activity have placed a strain on the city's transportation infrastructure; to address that issue, more than $1 billion in road improvement projects will take place over several years. The Hiawatha Light Rail opened to travelers in 2004; future expansion will make it into a 13-mile line that will connect downtown Minneapolis with Minneapolis-Saint Paul International Airport and the Mall of America in Bloomington. Planning is complete for a regional rail route, the Northstar Corridor, which will connect St. Cloud with Minneapolis using an existing 40-mile freight corridor. The $265 million project is projected to be in service in late 2008.
The city completed a $175 million expansion of the Minneapolis Convention Center in 2002. The expansion added 600,000 square feet of exhibit space, making the center one of the 20 largest in the country. The new section includes 190,000 square feet of exhibition space, with 60,000 square feet of that space divisible into 44 individual meeting rooms, and a 3,400 seat auditorium.
Economic Development Information: Minneapolis Regional Chamber of Commerce, Chamber of Commerce Building, Young Quinlan Building, 81 South Ninth Street, Suite 200, Minneapolis, MN 55402; telephone (612)370-9100; fax (612)370-9195; email firstname.lastname@example.org.
An important factor in the Minneapolis economy is the Minneapolis-Saint Paul International Airport, which is served by 16 cargo carriers and air-freight forwarders. The airport handles more than 170,000 tons of freight yearly. The Twin Cities area is also linked with major United States and Canadian markets via a network of four railroad companies.
Considered one of the largest trucking centers in the nation, Minneapolis-Saint Paul is served by 150 motor freight companies that provide overnight and four- to five-day delivery in the Midwest and major markets in the continental United States. Vital to the Twin Cities' role as a primary transportation hub is the port of Minneapolis, which together with the port of Saint Paul processes annually more than 11 million tons of cargo to and from domestic and foreign markets.
Labor Force and Employment Outlook
The Twin Cities boasts an educated work force; 24.3 percent of people 25 years old or older have four or more years of college. Unemployment in the Twin Cities remained low in the early 2000s. Companies are expanding rapidly and there is considerable competition for skilled workers especially in the areas of healthcare and technical positions, social services, personal care, construction, and computer professions.
The suburban Mall of America, one of the most popular tourist destinations in the United States, has a significant economic impact. The Twin Cities' economy is keeping pace with, and in some cases surging ahead of the national economy. Some of the leading industries are medical instrument and supplies manufacturing, printing and publishing, transportation equipment, computer and data processing services, finance, and engineering and management services. In 2005, BestJobsUSA.com selected Minneapolis one of the Top 20 Best Places to Live & Work in America.
The following is a summary of data regarding the Minneapolis-Saint Paul metropolitan area, 2004 annual average:
Size of non-agricultural labor force: 1,738,000
Number of workers employed in . . .
mining and construction: 82,800
transportation and utilities: 335,900
financial activities: 140,500
professional and business services: 245,900
educational and health services: 216,100
leisure and hospitality: 154,500
other services: 75,800
Average hourly earnings of production workers employed in manufacturing: $17.59
Unemployment rate: 4.2% (February 2005)
Cost of Living
The Twin Cities region has one of the lowest costs of living among the 25 largest cities in the United States.
The following is a summary of data regarding several key cost of living factors in the Minneapolis area.
2004 (3rd Quarter) ACCRA Average House Price: $296,846
2004 (3rd Quarter) ACCRA Cost of Living Index: 109.3 (Minneapolis/St. Paul) (U.S. average = 100.0)
State income tax rate: Ranges from 5.35% to 7.85%
State sales tax rate: 6.5%
Local income tax rate: None
Local sales tax rate: 0.5%
Property tax rate: $118.42 per $1,000 assessed value (2005)
Economic Information: Minneapolis Regional Chamber of Commerce, Young Quinlan Building, 81 South Ninth Street, Suite 200, Minneapolis, MN 55402; telephone (612)370-9100
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