Northwest Minnesota Economic and Business Conditions Report
 

Document Type

Research Study

Publication Date

5-22-2014

Abstract

Northwest Minnesota business conditions are expected to slow over the next several months according to the predictions of the St. Cloud State University (SCSU) Northwest Minnesota Index of Leading Economic Indicators. The macroeconomic environment for rural America has softened and consumer sentiment has slowed slightly. Poor weather did not interfere much with building permits in the region’s two metro areas. The Northwest Minnesota index in contrast rose 2.2 percent in the previous year, so we foresee no recession, just a slower period than 2012 or 2013.

There were 1,024 new business filings with the Office of the Minnesota Secretary of State in Northwest Minnesota in the first quarter of 2014 — representing a 5.5 percent decline from one year ago. There were 120 new regional business incorporations in the first quarter, a 6.2 percent increase over year ago levels. Over the past 12 months, new limited liability company (LLC) filings in Northwest Minnesota decreased by 7.1 percent — declining to 514 in the first quarter of 2014. New assumed names totaled 345 in this year’s first quarter — a reduction of 7.8 percent from the first quarter of 2013. There were 45 new filings for Northwest Minnesota non-profits in the first quarter — 2.3 percent more filings than one year ago.

Employment of Northwest Minnesota residents increased by 1.9 percent over the year ending March 2014. More than 5,000 more residents of Northwest Minnesota were employed compared to one year ago. The regional unemployment rate was 6.9 percent in March, an improvement on its 7.2 percent reading one year ago. Initial claims for unemployment insurance decreased from year-ago levels and are the second-lowest recorded total over the past six months. Job vacancies have increased over the last three years in Northwest Minnesota. There is now nearly one vacancy for every two people unemployed in this region of Minnesota.

The two Metropolitan Statistical Areas (MSAs) in Northwest Minnesota—Fargo/Moorhead and Grand Forks/East Grand Forks — appeared to have strong economic performance over the past quarter. Each MSA experienced an annualized increase in employment and earnings, and a decrease in initial jobless claims and the unemployment rate. In addition, Grand Forks/East Grand Forks saw a big jump in the valuation of residential building permits, and Fargo/ Moorhead saw a decline in its relative cost of living.

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