Northwest Minnesota business conditions are expected to improve over the next several months according to the predictions of the St. Cloud State University (SCSU) Northwest Minnesota Index of Leading Economic Indicators (LEI). A stronger macroeconomic environment for rural America and rising consumer sentiment have contributed to a 2.06 point increase in the LEI. After two consecutive quarters of decline in the LEI, the Northwest Minnesota economy seems likely to grow more rapidly over the next several months. However, this part of the state is particularly vulnerable to weakness in the agriculture and energy sectors of the economy, so outside factors could still adversely affect economic performance in this planning area. Lower initial jobless claims earlier in the year and a rise in new incorporations and limited liability companies (LLCs) also helped drive this quarter’s LEI into positive territory. The one area of weakness in the index was a fall in residential building permits in the two key metropolitan areas of Northwest Minnesota.
There were 1,129 new business filings with the Office of the Minnesota Secretary of State in Northwest Minnesota in the second quarter of 2015 — representing a 3.7 percent increase from one year ago. 118 new regional business incorporations were recorded in the most recent quarter, a 4.8 percent reduction from the same quarter last year. In the second quarter, new LLC filings in Northwest Minnesota were up 13.9 percent—increasing to 614. New assumed names totaled 343 in this year’s second quarter—a reduction of 10.9 percent from the same period in 2014. There were 54 new filings for Northwest Minnesota non-profits in the second quarter—31.7 percent more filings than one year ago.
Employment of Northwest Minnesota residents increased by 3.2 percent over the year ending June 2015. The regional unemployment rate was 4.4 percent in June, unchanged from one year ago. Initial claims for unemployment insurance in June were 176 lower (a decrease of 11.6 percent) than in June 2014 and average weekly wages rose 5.2 percent to $734 in the most recent reporting period. The regional labor force expanded by 9,450 (a 3.1 percent increase) from one year earlier.
The Fargo/Moorhead Metropolitan Statistical Area (MSA) experienced a mixed economic performance over the past quarter. This MSA tallied strong gains in overall employment (but decreased employment in mining/logging/construction and manufacturing sectors), a rise in average hourly earnings, and a lower unemployment rate. This was offset by fewer residential building permits, a reduced work force, weaker average hours worked, higher initial jobless claims, and a higher cost of living. Economic activity in the Grand Forks/East Grand Forks MSA was similarly mixed in the second quarter. Higher employment, a lower area unemployment rate, a rising labor force, and lower initial jobless claims were offset by declining weekly work hours, lower average hourly earnings, and a reduction in residential building permits
MacDonald, Richard A. and Banaian, King, "Northwest Minnesota Economic and Business Conditions Report - Second Quarter 2015" (2015). Northwest Minnesota Economic and Business Conditions Report. 6.