Modest improvement in Northeast Minnesota economic conditions is expected over the next several months according to the predictions of the Northeast Minnesota Index of Leading Economic Indicators (LEI). Two of the five components of the LEI increased as the overall index rose for a second straight quarter. An improvement in a general measure of statewide business conditions and a rise in a supply managers’ survey index had a positive impact on the LEI, while a rise in initial jobless claims earlier in the year dragged down the index. Sluggish new filings for incorporation earlier this year and a decline in the number of Duluth area residential building permits also weighed on the index. Overall, the outlook remains one of slow positive economic growth in the Northeast Minnesota planning area over the next several months.
There were 584 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the second quarter of 2016 — representing a 4.5 percent increase from one year earlier. Fifty-three new regional business incorporations were filed in the second quarter—a 1.9 percent rise from 2015. New limited liability company (LLC) filings in Northeast Minnesota rose 3.1 percent to a level of 302. New assumed names totaled 199 in the second quarter—a 3.6 percent increase from the second quarter of 2015. There were 30 new filings for Northeast Minnesota non-profit in the 2016 second quarter—eight more than one year earlier.
Northeast Minnesota employment was 0.8 percent lower than year ago levels in June. The regional unemployment rate was 6.2% (a large increase from 5.3% one year ago) while the labor force was basically unchanged. June 2016 initial claims for unemployment insurance were 320 lower than the year earlier (a 21.4 percent decrease). Average weekly wages rose by 4.9% to $842 in the most recent quarter for which data are available. Northeast Minnesota bankruptcies continued to slowly decline in this year’s second quarter.
Economic activity in the Duluth/Superior Metropolitan Statistical Area (MSA) was mostly negative. Northeast Minnesota’s largest market experienced a 0.8 percent decline in overall employment over the year ending June 2016, but the key education/health sector added jobs. The length of the workweek and average hourly earnings also fell. The area unemployment rate rose to 5.8 percent and the labor force contracted. The value of residential building permits decreased in June compared to the same period in 2015.
Banaian, King and MacDonald, Richard A., "Northeast Minnesota Economic and Business Conditions Report - Second Quarter 2016" (2016). Northeast Minnesota Economic and Business Conditions Report. 10.