Southeast Minnesota Economic and Business Conditions Report
 

Document Type

Research Study

Publication Date

6-2015

Abstract

Southeast Minnesota business conditions are expected to improve over the first several months of 2015 according to a variety of economic indicators. Driven by improvements in consumer sentiment and an increase in Rochester area residential building permits, the Southeast Minnesota Index of Leading Economic Indicators (LEI) increased by 3.49 points in the fourth quarter of 2014. The LEI is now 7.3 percent above its December 2013 value. A decline in new filings for business incorporation and limited liability company (LLC) combined with increased initial jobless claims earlier in 2014 were negative factors in the December 2014 LEI. A fall in the Minnesota Business Conditions index also unfavorably impacted the Southeast Minnesota economic outlook.

There were 754 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the fourth quarter of 2014 — representing a 3.3 percent decline from one year earlier. There were 89 new regional business incorporations in the fourth quarter, an 18.7 percent increase from the fourth quarter of 2013. New limited liability company filings in Southeast Minnesota fell by 8 percent from the prior year. Regional new LLC filings totaled 414 in the fourth quarter of 2014. New assumed name filings increased by 1.9 percent to 211 and there were 40 new filings for Southeast Minnesota non-profit in the fourth quarter—a 16.7 percent decline from the same quarter in 2013.

Employment of Southeast Minnesota residents increased by 1 percent over the year ending December 2014. Compared to December 2013, 2,756 more residents of Southeast Minnesota now have jobs. The regional unemployment rate was 3.2 percent in December, an improvement from 4 percent in the year earlier period. Initial claims for unemployment insurance in January 2015 were 244 lower (an 11.2 percent decline) than one year earlier. The Southeast Minnesota labor force increased slightly over the year ending December 2014 and average weekly wages rose by 1.3 percent to $857 in the most recent reporting period.

Data from the Rochester area—the largest market in Southeast Minnesota—were fairly strong, with recent weakness in average hourly earnings and slightly lower new business filings being offset by a number of improved economic indicators. These favorable indicators include increased employment (including increases in the key manufacturing and education/health sectors), a longer average workweek, a reduced unemployment rate, lower jobless claims, an increased labor force, and a rise in the value of residential building permits.

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