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Economy ofMinnesota

State quarter
Statistics
GDP	$472 billion (2023)[1]
GDP per capita	$62,005 (2020)[2]
Population belowpoverty line	9.6% (2023)[3]
Gini coefficient	0.4434 (2023)[4]
Labor force	3,108,458 (2022)[5]
Unemployment	3.5% (November 2024)[6]
Public finances
Revenues	$67.7 billion (FY 2022-23)[7]
Expenses	$51.6 billion (FY 2022-23)[8]

Theeconomy of Minnesota produced US$472 billion of gross domestic product in 2023.^[9]Minnesota headquartered 15 Fortune 500 companies in 2023, the largest of which wereUnitedHealth Group (5th) andTarget (33rd).^[10] Theper capita personal income in 2022 was $60,785, ranking ninth in the nation.^[11] The median household income in 2023 was $82,338.^[12]

Minnesota's economy has transformed in the past 200 years from one based onraw materials to one based on finished products and services.

The earliest industries werefur trading and agriculture. Agriculture is still a major part of the economy even though only a small percentage of the population, less than 1%, are employed in the farming industry.^[13]

In TheBlufflands, cheese, wine, honey, milk, apples, and maple syrup are produced.

Minnesota is the U.S.'s largest producer ofsugar beets,sweet corn, andgreen peas for processing and farm-raisedturkeys.^[14] Stateagribusiness has changed from production to processing and the manufacturing of value-added food products by companies such asGeneral Mills,Cargill,Hormel Foods Corporation (prepackaged and processed meat products), and the McDonald Food Company.

Manufacturing was not left out, either. Thebrass era automobile maker Dan Patch was founded inMinneapolis in 1911.^[15]

Retail is represented byTarget Corporation,Best Buy, andSupervalu, all headquartered in the Twin Cities.Southdale Center, the first fully enclosed and completely climate-controlled shopping mall in the United States opened on October 8, 1956, in the suburban city ofEdina. The largest shopping mall in the United States, theMall of America, is located inBloomington.

St. Jude Medical represents a growing biomedical industry spawned by university research, and Rochester is the headquarters of the world-famousMayo Clinic.UnitedHealth Group is the second largest health insurance company in the U.S.

Financial institutions includeU.S. Bancorp,Ameriprise andThrivent Financial for Lutherans.

As might be expected in state with a love of the outdoors, boats and other recreational products are manufactured by a number of Minnesota companies, includingPolaris Industries andArctic Cat, who makesnowmobiles andATVs, Alumacraft Boat Company, and Lund Boats.

Today, the most salient characteristic of the economy is its diversity; the relative outputs of its business sectors closely match the United States as a whole.^[16]

Mining plays a significant role in Minnesota’s economy, particularly in the northeastern region known as theIron Range. The state is the largest producer of iron ore in the United States, primarily through the mining and processing oftaconite, a low-grade iron ore that requires pelletizing before shipment.^[17] Mining operations are concentrated on theMesabi Range, with additional activity on theVermilion andCuyuna Range.

Companies currently operating large-scale taconite facilities includeCleveland-Cliffs, which owns and operates the United Taconite and Northshore Mining plants, andUnited States Steel, which operates the Minntac and Keetac facilities.ArcelorMittal manages the Minorca Mine nearVirginia.

Most mined ore is shipped by rail to ports inDuluth,Two Harbors, andSuperior, Wisconsin, where it is loaded onto bulk freighters for transport to steel mills in the Great Lakes region. Employment in the mining sector has declined over time due to mechanization and consolidation, but the industry remains one of the largest sources of high-wage jobs in northeastern Minnesota.^[18]

Forestry remains an active component of Minnesota’s resource economy, especially in the northern part of the state. The forest products industry includes logging, pulpwood processing, engineered wood production, and paper manufacturing. According to theMinnesota Department of Natural Resources, approximately 17 million acres of forest land cover the state, with a mix of public, tribal, and private ownership.

Minnesota’s timber industry supports both primary manufacturing (such as sawmills and veneer production) and secondary manufacturing (including cabinetry, furniture, and packaging). Sustainable forestry practices, including selective harvesting and replanting, are regulated at both the state and federal level.^[19]

Mesabi Metallics, a proposed mining and pelletizing facility nearNashwauk, Minnesota, represents the largest private business investment in Minnesota in recent decades.^[20][21] Currently, Mesabi Metallics reports 1.8 billion dollars in private development to the Minnesota Department of Employment and Economic Development. The project, located on a formerEssar Steel site, has been the subject of prolonged legal and financial disputes but resumed construction in 2024 under new management and reports being on track to begin commercial operation in the first quarter of 2026.^[22]

The facility is designed to produce high-grade taconite pellets for the domestic steel industry, with potential plans for direct-reduced iron (DRI) capabilities. When completed, the project is expected to support hundreds of construction jobs and more than 300 permanent positions. The site spans over 3,200 acres and includes both a mine and a processing plant.

State and local officials have emphasized the economic importance of the project forSt. Louis County,Itasca County, and the broaderMesabi Iron Range.^[23]

Minnesota attracted entrepreneurs and engineers, especially in the computer industry, and became a leading center of computer manufacturing after the war.^[24]Engineering Research Associates was formed in 1946 to develop computers for the Navy and the intelligence agencies. It merged withRemington Rand, and soon became a division ofSperry Rand.^[25]William Norris,Seymour Cray, and others left Sperry in 1957 to formControl Data Corporation (CDC).^[26]Cray Research was formed whenCray left CDC to form his own company. "Minnesota was the undisputed epicenter of top-secret digital computing for decades."^[27] Medical device makerMedtronic also was founded in the Twin Cities in 1949.Honeywell was a national force in computing until selling its computer division toGroupe Bull in 1989, remaining a prominent military and aerospace concern headquartered in Minnesota until 1999 when, after a merger, it moved to New Jersey. National firms, such asInternational Business Machines, moved manufacturing and R&D operations to Minnesota. State government and powerful politicians such asHubert Humphrey maintained a favorable climate. TheMinnesota Educational Computing Consortium brought state-wide networked computing in the 1970s and developed educational software such as the popular "Oregon Trail" game. TheFederal Reserve Bank of Minneapolis combined computing power with financial clout across its region from Montana to upper Michigan. The University of Minnesota trained many computer specialists who decided to stay in the Minnesota rather than move toCalifornia. Minnesota thus preceded the better-known industrial districts of Route 128 around Boston and Silicon Valley.^[28] An active high-technology sector is represented today byAlliant Techsystems,Ceridian,Cray,Digi International,Digital River,Geek Squad,Hutchinson Technology,Imation,IBM Rochester,Lawson Software,MacSoft,Medtronic,MTS Systems,St. Jude Medical,Stratasys,SPS Commerce,3M, and more than 400smaller software companies.

The following table lists the Minnesota-based non-profit organizations among the largest 400 in the U.S. by 2006 private donations.^[29]

The following table lists the privately held companies headquartered in Minnesota with 2007 revenues over $1 billion.^[30]

The following table lists the public companies headquartered in Minnesota with 2010 revenues placing them in the 1000 largest U.S. companies.^[10]

As of 2025, Minnesota's largest employers were:^[31]

The state does not produce any petroleum of its own but boasts the largestoil refinery of any non-oil-producing state, thePine Bend Refinery. As of 2001, Minnesotans were using a total of 7.2 million US gallons (27,000 m³) of gasoline per day, and fuel use rises in the region by about 2% annually. About 70% of the gasoline fuel used in the state comes from Pine Bend and the nearby St. Paul Park Refinery, while most of the rest comes from a combination of the Mandan Refinery inNorth Dakota, and theSuperior Refinery inSuperior, Wisconsin. 40 to 50% of Pine Bend's output is used within the state. Flint Hills is currently planning a $100 million expansion to increase capacity at the plant to about 330,000 barrels per day (52,000 m³/d). Petroleum from the north comes to the state through one of the longest pipelines in the world, theLakehead Pipeline and theMinnesota Pipeline. Additional crude comes from the south via the Wood River Pipeline.

Ethanol fuel is produced in the state, and consumer gasoline is required to contain 10% ethanol (E10). As of 2006, Minnesota is the only U.S. state with such a mandate. 20% ethanol (E20) will be mandated in 2013.^[32] Minnesota has the highest number of fuel stations offeringE85 fuel, with 300 statewide.^[33] A 2%biodiesel blend has also been required indiesel fuel since 2005. Electricity-producingwind turbines have become popular, particularly in the windy southwest region on theBuffalo Ridge. As of November 2006, the state is the country's fourth-largest producer ofwind power, with 812 megawatts installed and another 82 megawatts planned.^[34]

Like other Midwestern states that experience cold winters, Minnesota is heavily dependent on natural gas for home heating. Just over two-thirds of homes use the fuel.

Minnesota's income tax isprogressive with four rates, 5.35%, 7.05%, 7.85%, and 9.85%.^[35] Thesales tax in Minnesota for most items is 6.875% effective July 1, 2009.^[36] The state does not charge sales tax on clothing, someservices, or food items for home consumption.^[37] Thestate legislature may allow municipalities to institute local sales taxes and special local taxes, such as the 0.5% supplemental sales tax in Minneapolis.^[38] The cities of St. Paul, Rochester, Duluth and St. Cloud have similar taxes.Excise taxes are levied on alcohol, tobacco, and motor fuel. The state imposes ause tax on items purchased elsewhere but used within Minnesota. Owners ofreal property in Minnesota payproperty tax to their county, municipality, school district, and special taxing districts. The overall state and local tax burden is calculated to average 11.9% in 2006, ranking 4th highest in the country.^[39]

• Minnesota Labor Relations Act (1939)

Business

• Start a Business in Minnesota
• Small Business Community of Minnesota
• Small business Administration of Minnesota
• Minnesota Office of the Secretary of State forms and documentsArchived June 6, 2011, at theWayback Machine
• Thomas J. Misa,Digital State: The Story of Minnesota's Computing Industry (University of Minnesota Press 2013 andJSTOR andOpenLibrary)

• Economy of Minnesota

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