Economic growth in Southeast Minnesota is expected to be steady over the next several months according to the most recent prediction of the Southeast Minnesota Index of Leading Economic Indicators (LEI). After a quarter in which the LEI experienced a small decline, the Southeast Minnesota leading index fell by 3.18 points in the second quarter of 2016. The fall in the LEI was caused by a sharp rise in initial claims for unemployment benefits in recent months—the other four index components have positive readings. Improvement in the Minnesota Business Conditions Index (which serves as a general measure of state business conditions) and a small increase in the number of residential building permits in the Rochester area had a positive influence on the leading index. Stronger consumer sentiment also helped lift the index.
There were 911 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the second quarter of 2016 — representing a 5.4 percent increase from one year ago. There were 73 new regional business incorporations in the second quarter, a 21.7 percent increase from prior year levels. At a level of 536, second quarter new limited liability company (LLC) filings in Southeast Minnesota were 5.3 percent higher than the second quarter of 2015. New assumed names totaled 256 in the second quarter—a 4.1 percent improvement over the same quarter in 2015. There were 46 new filings for Southeast Minnesota non-profits over the three months ending June 2016—five fewer filings than one year earlier.
Employment of Southeast Minnesota residents fell by 0.4 percent over the year ending June 2016. Compared to June 2015, 1,219 fewer residents of Southeast Minnesota now have jobs. The regional unemployment rate was 3.6 percent in June, slightly higher than the 3.5 percent level recorded in June 2015. Initial claims for unemployment insurance in June 2016 were 2.6 percent lower than one year earlier. The Southeast Minnesota labor force contracted by 0.3 percent over the past year. The average weekly wage in the Southeast Minnesota planning area was $936 in last year’s fourth quarter. This represents a 6.7 percent increase from the fourth quarter of 2014. The planning area’s bankruptcies continued to fall and have now reached historically low levels.
Data from the Rochester area—the largest market in Southeast Minnesota—were mostly favorable, with an increase in overall employment (along with employment growth in the key health/education sector), higher average hourly earnings, an expanding labor force, higher new business filings, and a larger value of residential building permits having a positive impact on the outlook. On the negative side was a shorter workweek and lower new filings for incorporation. Initial jobless claims and the unemployment rate were unchanged from year ago levels.
Banaian, King and MacDonald, Richard A., "Southeast Minnesota Economic and Business Conditions Report - Second Quarter 2016" (2016). Southeast Minnesota Economic and Business Conditions Report. 10.