Business conditions in Northeast Minnesota are expected to improve 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 in this year’s second quarter as the overall index rose by 8.22 points. After being in negative territory for the previous two quarters, this quarter’s positive LEI reading is a welcome sign of future improvement in the Northeast Minnesota economy. A recent rise in initial jobless claims in the region was the only drag on the LEI in the second quarter. A rise in residential building permits in the Duluth/Superior area earlier in the year had a favorable impact on the outlook. Also contributing to the stronger results was an improvement in a general measure of state business conditions, higher filings for business incorporation over the past several months, and an increase in a supply managers’ survey index.
There were 559 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the second quarter of 2015 — representing a 2 percent improvement from one year ago. Fifty-two new regional business incorporations were filed in the second quarter, representing no change from 2014. New limited liability company (LLC) filings in Northeast Minnesota rose by 14.9 percent to 293. New assumed names totaled 192 in this year’s second quarter—an 8.6 percent decrease from the second quarter of 2014. There were 22 new filings for Northeast Minnesota non-profit in the 2015 second quarter—nine fewer than one year earlier.
Northeast Minnesota employment was 0.4 percent higher than year earlier levels in June. The regional unemployment rate increased to 5.6 percent, but the Northeast Minnesota labor force grew by 0.6 percent. Despite this, the regional labor force is still 2,138 lower than in June 2010. June 2015 initial claims for unemployment insurance were 263 higher than the year earlier (a 21.4 percent increase) and average weekly wages finished the fourth quarter of 2014 at $803, a 3.3 percent increase from the end of 2013.
Economic performance in the Duluth/Superior Metropolitan Statistical Area (MSA) was largely favorable. Northeast Minnesota’s largest market experienced a 1.5 percent rise in overall employment over the year ending June 2015, and the key education/health sector added jobs. The length of the workweek stabilized as average hourly earnings rose. The area unemployment rate rose and the labor force also increased. The value of residential building permits was 75.2 percent lower in June than one year earlier. This may cause a weaker outlook in future quarters.
MacDonald, Richard A. and Banaian, King, "Northeast Minnesota Economic and Business Conditions Report - Second Quarter 2015" (2015). Northeast Minnesota Economic and Business Conditions Report. 6.