Southeast Minnesota Economic and Business Conditions Report
 

Document Type

Research Study

Publication Date

9-2015

Abstract

Southeast Minnesota business conditions are expected to improve over the next several months according to the most recent prediction of the Southeast Minnesota Index of Leading Economic Indicators (LEI). All five LEI components were positive in the second quarter of 2015 as the index rose 9.88 points after recording a negative reading in this year’s first quarter. However, the LEI is still 4.8 percent lower than one year ago. A reduction in Southeast Minnesota initial jobless claims, recent improvement in the Minnesota Business Conditions Index (which serves as a general measure of state business conditions), higher new business filings, a rise in Rochester area residential building permits, and an improvement in consumer confidence have all favorably impacted the regional outlook.

There were 864 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the second quarter of 2015 — representing a 2.6 percent improvement from one year ago. There were 60 new regional business incorporations in the second quarter, a 20 percent fall from year ago levels. Second quarter new limited liability company (LLC) filings in Southeast Minnesota fell by 0.8 percent—declining to 509 in the most recent period. New assumed names totaled 246 in this year’s second quarter—an increase of 15.5 percent from the same quarter in 2014. There were 51 new filings for Southeast Minnesota non-profits over the three months ending June 2015—10 more filings than one year ago.

Employment of Southeast Minnesota residents increased by 1.2 percent over the year ending June 2015. Compared to June 2014, 3,238 more residents of Southeast Minnesota now have jobs. The regional unemployment rate was 3.6 percent in June, an improvement from 3.9 percent in the year earlier period. Initial claims for unemployment insurance in June 2015 were slightly lower than one year ago. The Southeast Minnesota labor force expanded by 2,745 over the past year, representing a 1 percent increase over the past twelve months. Average weekly wages declined by $10 (a 1.1 percent reduction) in the most recent period.

Data from the Rochester area—the largest market in Southeast Minnesota—were mixed, with a small decrease in overall employment (and a small reduction in health/education sector employment) and lower new business filings having a negative impact on the outlook. On the favorable side was a rise in the length of the workweek, increased average hourly earnings, a lower unemployment rate, increased labor force, lower initial jobless claims, and a rising value of residential building permits.

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