Continued strong economic growth in Northeast Minnesota is expected over the next several months according to the predictions of the Northeast Minnesota Index of Leading Economic Indicators (LEI). Four of the five components of the LEI increased as the overall index surged by 6.25 points in the first quarter. An increase in the number of Duluth area residential building permits, an improvement in a general measure of statewide business conditions, a rise in a supply managers’ survey, and increased new filings of incorporation all helped lift this quarter’s index.
There were 626 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the first quarter of 2017 — representing a 2 percent decrease from one year earlier. Seventy-one new regional business incorporations were filed in the first quarter—39.2 percent more than in the same period of 2016. New limited liability company (LLC) filings in Northeast Minnesota rose 2.4 percent to a level of 345. New assumed names fell 17.7 percent and there were three fewer non-profits filings compared to one year earlier.
Sixty-six percent of new business filers in the Northeast Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year’s first quarter. Results of this voluntary survey indicate that about 3 percent of new filers come from communities of color, while more than 10 percent of new filings come from veterans. Nearly 3 percent of new filers come from the disability community and 1 percent of new filings are made by the immigrant community. Forty-three percent of new business filings in Northeast Minnesota in this year’s first quarter were initiated by women. MBS results also show that most new business filers in Northeast Minnesota have between 0 and $10,000 in annual gross revenues (although 39 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Northeast Minnesota are construction, retail trade, other services, real estate/rental/leasing, and arts/ entertainment/recreation. Employment levels at most new firms are between 0 and 5 workers, and nearly half of those starting a new business consider this a part-time activity.
Northeast Minnesota employment was 0.2 percent lower than year ago levels in March. The regional unemployment rate was 6.8% (considerably lower than one year ago) while the labor force contracted by 1.4% from one year earlier. March 2017 initial claims for unemployment insurance were nearly 10 percent lower than the same month last year and the region’s job vacancies remain elevated. Annual bankruptcies in Northeast Minnesota continue to fall.
Economic activity in the Duluth/Superior Metropolitan Statistical Area (MSA) was mixed. Northeast Minnesota’s largest market experienced a 0.8 percent increase in overall employment over the year ending March 2017, but it shed jobs in its key education/health sector. The area unemployment rate fell to 5.9 percent, but the labor force contracted by 0.7 percent. Average weekly work hours rose 2.8 percent, but average hourly earnings fell. The value of residential building permits was slightly lower than March 2016.
MacDonald, Richard A. and Banaian, King, "Northeast Minnesota Economic and Business Conditions Report - First Quarter 2017" (2017). Northeast Minnesota Economic and Business Conditions Report. 13.