Southeast Minnesota Economic and Business Conditions Report
 

Document Type

Research Study

Publication Date

6-2015

Comments

Southeast Minnesota business conditions are expected to slow over the next several months according to the most recent prediction of the Southeast Minnesota Index of Leading Economic Indicators (LEI). Four of the five LEI components turned negative in the first quarter of 2015 as the index fell -9.67 points after recording a positive reading in last year’s fourth quarter. The LEI is now 7.5 percent lower than one year ago. A reduction in Southeast Minnesota initial jobless claims was the one favorable indicator that contributed positively to this quarter’s index. Dragging down the LEI was weakness in the Minnesota Business Conditions Index (which serves as a general measure of state business conditions), lower new business filings in 2014, a decline last year in Rochester area residential building permits, and a small reduction in consumer confidence.

There were 887 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the first quarter of 2015 — representing a 4.7 percent improvement from one year ago. There were 72 new regional business incorporations in the first quarter, a 14.3 percent rise over year ago levels. First quarter new limited liability company (LLC) filings in Southeast Minnesota increased by 14.2 percent—rising to 540 in the most recent period. New assumed names totaled 245 in this year’s first quarter—a reduction of 10.3 percent from the same quarter in 2014. There were 30 new filings for Southeast Minnesota non-profits in the first three months of 2015—eight fewer filings than one year ago.

Employment of Southeast Minnesota residents increased by 2.4 percent over the year ending March 2015. Compared to March 2014, 6,360 more residents of Southeast Minnesota now have jobs. The regional unemployment rate was 4.3 percent in March, an improvement from 4.9 percent in the year earlier period. Initial claims for unemployment insurance in April 2015 were 371 lower (a 26.4 percent decline) than one year ago. The Southeast Minnesota labor force expanded by 4,743 over the past year, representing a 1.7 percent increase over the past 12 months. Regional job vacancies surged in the most recent period. There are now 81.99 Southeast Minnesota job vacancies for every 100 unemployed workers—a 50 percent increase over the prior six month period.

Data from the Rochester area—the largest market in Southeast Minnesota—were largely improved, with an increase in overall employment, a rise in the length of the workweek, a lower unemployment rate, increased labor force, lower initial jobless claims, increased new business filings, and a rising value of residential building permits leading the way. The only negative indicators in this area were lower average hourly earnings and a decline in manufacturing employment.

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