Southeast Minnesota Economic and Business Conditions Report
 

Document Type

Research Study

Publication Date

1-2015

Abstract

Southeast Minnesota business conditions are expected to remain steady over the next several months according to a variety of economic indicators. Despite a small decline in the Southeast Minnesota Index of Leading Economic Indicators (LEI) in the third quarter, the level of the LEI is well above its 2013 value. Improvements in consumer sentiment and lower initial jobless claims had a positive impact on this quarter’s LEI, while a slowing of the growth of new filings for business incorporation and limited liability company (LLC), a fall in the Minnesota Business Conditions index, and declining Rochester metropolitan area residential building permits served as a drag on the leading index. Despite the one-point decline in the third quarter LEI, the Southeast Minnesota Index remains 5.5 percent higher than one year ago.

There were 765 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the third quarter of 2014 — representing a 9.9 percent decline from one year ago. There were 74 new regional business incorporations in the third quarter, a 37 percent rise over year ago levels. Over the past year, new limited liability company (LLC) filings in Southeast Minnesota increased by 2.8 percent—rising to 442 in the third quarter of 2014. New assumed names totaled 212 in this year’s third quarter—a reduction of 34.4 percent from the third quarter of 2013. There were 37 new filings for non-profits in the third quarter—two more filings than one year ago.

Employment of Southeast Minnesota residents increased by 0.9 percent over the year ending September 2014. Compared to September 2013, nearly 2,500 more residents now have jobs. The regional unemployment rate was 3.3 percent in September, an improvement from 4.2 percent in the year earlier period. Initial claims for unemployment insurance in October 2014 were 324 lower (a 21.6 percent decline) than one year ago. The labor force was little changed over the past 12 months. Regional job vacancies increased in the most recent period. Job vacancies per 100 unemployed are now higher than they have been for many years. Bankruptcies fell to an annual total of 883 in the second quarter. This is 17.3 percent lower than the annual total in last year’s second quarter.

Data from the Rochester area—the largest market in Southeast Minnesota—were mixed with recent weakness in the value of residential building permits, lower new business filings, and lower average hourly earnings being offset by lower initial jobless claims, expanded employment, and a declining Rochester area unemployment rate.

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