The Northwest Minnesota planning area economy is expected to experience strong growth over the next several months according to the predictions of the St. Cloud State University (SCSU) Northwest Minnesota Index of Leading Economic Indicators (LEI). Four of the five components of the leading index were higher in the fourth quarter, as the LEI surged by 7.84 points. An increase in the Rural Mainstreet Index (which signals an improving macroeconomic environment for rural America) and stronger consumer sentiment helped drive the index higher. Lower initial jobless claims and increased residential building permits in Fargo/Moorhead and Grand Forks/East Grand Forks also contributed favorably to the outlook. A fifth LEI component, new filings for LLC and incorporation in the Northwest Minnesota planning area, was the only LEI component that declined in the fourth quarter.
There were 958 new business filings with the Office of the Minnesota Secretary of State in Northwest Minnesota in the fourth quarter of 2016 — representing a 3.8 percent increase from one year ago. 126 new regional business incorporations were recorded in the most recent quarter, which was 12.5 percent higher than in the same quarter of 2015. In the fourth quarter, new LLC filings in Northwest Minnesota were up 1.4 percent from one year earlier—rising to 511. New assumed names totaled 284 in the fourth quarter—9.7 percent more filings than the same period in 2015. There were 37 new filings for Northwest Minnesota non-profits in the fourth quarter—eleven fewer filings than one year ago.
Using preliminary data, employment of Northwest Minnesota residents declined by 2.3 percent over the year ending December 2016. The regional unemployment rate was 5.8 percent in December, which was higher than the 5.3 percent rate observed one year ago. The Northwest Minnesota labor force contracted over the past twelve months (there are now 5,411 fewer people in the regional labor force than there was one year ago). Initial claims for unemployment insurance in December 2016 were 4.5 percent lower than one year earlier. Average weekly wages in Northwest Minnesota in the second quarter of 2016 rose to $708. The region’s total bankruptcies have started to rise.
Economic performance in the Fargo/Moorhead Metropolitan Statistical Area (MSA) was mostly favorable in the past quarter. This MSA tallied gains in overall employment and in mining, logging and construction employment (but decreased manufacturing employment), lower initial jobless claims, a rise in the regional workforce, and a lower relative cost of living. The area did experience an increased unemployment rate (which can be partly explained by a rising labor force) and lower valuation of residential building permits. Economic activity in the Grand Forks/East Grand Forks MSA was also favorable in the fourth quarter. Higher overall employment (including an increase in manufacturing employment), a rising labor force, and lower initial jobless claims all contributed favorably to regional economic performance. However, the area unemployment rate was higher and the value of residential building permits in Grand Forks/East Grand Forks fell.
MacDonald, Richard A. and Banaian, King, "Northwest Minnesota Economic and Business Conditions Report - Fourth Quarter 2016" (2017). Northwest Minnesota Economic and Business Conditions Report. 12.