Southeast Minnesota economic performance is expected to remain 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 gain, the Southeast Minnesota leading index once again tallied a small increase by rising 0.6 points in the first quarter of 2016. Three of the five index components were positive in the most recent quarter. Improvement in the Minnesota Business Conditions Index (which serves as a general measure of state business conditions), falling quarterly claims for unemployment benefits, and an increase in new business filings for incorporation and LLC helped boost the first quarter LEI. A smaller number of residential building permits in the Rochester area and weakness in consumer sentiment had an unfavorable impact on the index.
There were 929 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the first quarter of 2016 — representing a 4.7 percent increase from one year ago. There were 80 new regional business incorporations in the first quarter, an 11.1 percent increase from prior year levels. At a level of 539, first quarter new limited liability company (LLC) filings in Southeast Minnesota were largely unchanged from the first quarter of 2015. New assumed names totaled 270 in the first quarter—a 10.2 percent improvement over the same quarter in 2015. There were 40 new filings for Southeast Minnesota non-profits over the three months ending March 2016—ten more filings than one year earlier.
Employment of Southeast Minnesota residents increased by 1.3 percent over the year ending March 2016. Compared to March 2015, 3,505 more residents of Southeast Minnesota now have jobs. The regional unemployment rate was 4.1 percent in March, an improvement from 4.2 percent in the year earlier period. Initial claims for unemployment insurance in March 2016 were nearly 20 percent lower than one year earlier. The Southeast Minnesota labor force expanded by 1.2 percent over the past year and regional job vacancies remained elevated. The planning area’s bankruptcies continued to fall.
Data from the Rochester area—the largest market in Southeast Minnesota—were mixed, with an increase in overall employment (along with employment growth in the key health/education sector), higher average hourly earnings, a lower unemployment rate, a reduction in initial jobless claims, and an expanding labor force having a positive impact on the outlook. On the negative side was a shorter workweek, a lower value of residential building permits, and reduced new business filings.
Banaian, King and MacDonald, Richard A., "Southeast Minnesota Economic and Business Conditions Report - First Quarter 2016" (2016). Southeast Minnesota Economic and Business Conditions Report. 9.