Northeast Minnesota economic performance is 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 the first quarter as the overall index followed up a negative reading in the fourth quarter with a positive move in the first three months of 2016. A decline in initial jobless claims in the region and a recent increase in filings for new business incorporation contributed favorably to the first quarter LEI. In addition, an improvement in a general measure of state business conditions and a rise in a supply managers’ survey index also had a positive impact on the leading index. A recent decline in Duluth-Superior MSA residential building permits was the only negative element of the LEI.
There were 639 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the first quarter of 2016 — representing a 16.8 percent increase from one year earlier. Fifty-one new regional business incorporations were filed in the first quarter—a 7.3 percent reduction from 2015. New limited liability company (LLC) filings in Northeast Minnesota rose 29.6 percent to a level of 337. New assumed names totaled 215 in the first quarter—a 4.4 percent increase from the first quarter of 2015. There were 36 new filings for Northeast Minnesota nonprofit in the 2016 first quarter—ten more than one year earlier.
Northeast Minnesota employment was 0.2 percent lower than year ago levels in March. The regional unemployment rate swelled to 7.8 percent (it was 5.9 percent in March 2015) as the labor force rose by 1.8 percent. The regional labor force is now 2,960 higher than it was in March 2015. March 2016 initial claims for unemployment insurance were 123 lower than the year earlier (an 8 percent decrease). Job vacancies per 100 unemployed were 68.03, a sharp decline from one year ago (when they were 116.23). After leveling out for the past year, Northeast Minnesota bankruptcies began to fall in this year’s first quarter.
Economic activity in the Duluth/Superior Metropolitan Statistical Area (MSA) was mixed. Northeast Minnesota’s largest market experienced a 1.9 percent decline in overall employment over the year ending March 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 7.1 percent as the labor force increased. The value of residential building permits increased in March compared to the same period in 2015.
Banaian, King and MacDonald, Richard A., "Northeast Minnesota Economic and Business Conditions Report - First Quarter 2016" (2016). Northeast Minnesota Economic and Business Conditions Report. 9.