Normal economic growth in Southwest Minnesota is expected over the next several months according to the predictions of the St. Cloud State University (SCSU) Southwest Minnesota Index of Leading Economic Indicators (LEI). Two of four LEI components were positive in the third quarter. An increase in new filings of incorporation and LLC and a jump in Mankato residential building permits made favorable contributions to the LEI this quarter. An increase in initial jobless claims and weakness in the rural outlook weighed on the index. After rising 1.27 points in the second quarter, the Southwest Minnesota LEI was essentially flat in the current quarter. The index is also largely unchanged over the past twelve months.
There were 544 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the third quarter of 2016 — representing 5 percent more new filings than one year earlier. There were 40 new regional business incorporation filings in the third quarter, a 17.6 percent increase over last year’s third quarter. New LLC filings in Southwest Minnesota declined by 1.2 percent—decreasing to 317 in the third quarter of 2016. New assumed names totaled 163 in the third quarter—23.5 percent more filings than in September 2015. There were 24 new filings for Southwest Minnesota non-profit in the third quarter—seven fewer than one year earlier.
Employment of Southwest Minnesota residents declined by 2.9 percent over the year ending September 2016. 6,157 fewer Southwest Minnesota residents have jobs than did one year earlier. The regional unemployment rate was 3.3 percent in September, an increase from a 3 percent reading in September 2015. Three hundred fewer initial claims for unemployment insurance were reported compared to year-ago levels in September—a 21.2 percent decrease. The Southwest Minnesota labor force contracted by 5,746 (a 2.6 percent decrease) over the year ending September 2016. There were 78.52 job vacancies per 100 people unemployed in the most recent quarter. Southwest Minnesota bankruptcies have begun to rise in Southwest Minnesota.
Economic performance in the Mankato/North Mankato Metropolitan Statistical Area (MSA)—the largest market in Southwest Minnesota—was mixed in the most recent quarter. On the positive side, average hourly earnings rose, employment increased, initial jobless claims fell, and the relative cost of living declined. This was offset by a decline in the length of the workweek, a smaller labor force, a larger unemployment rate, fewer new business filings, and a drop in the value of residential building permits.
Banaian, King and MacDonald, Richard A., "Southwest Minnesota Economic and Business Conditions Report - Third Quarter 2016" (2016). Southwest Minnesota Economic and Business Conditions Report. 11.