Somewhat slower 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 fourth quarter. An increase in new filings of incorporation and LLC and an improvement in the rural outlook contributed favorably to the LEI this quarter. An increase in initial jobless claims and lower residential building permits in the Mankato MSA weighed on the index. After rising just 0.03 points in the third quarter, the Southwest Minnesota LEI declined by 2.77 points in the current quarter. The index has now increased by 1.4% over the past twelve months.
There were 607 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the fourth quarter of 2016 — representing 10.4 percent more new filings than one year earlier. There were 56 new regional business incorporation filings in the fourth quarter, an 8.2 percent reduction from last year’s fourth quarter. New LLC filings in Southwest Minnesota surged by 32.6 percent—increasing to 386 in the fourth quarter of 2016. New assumed names totaled 140 in the fourth quarter—14.1 percent fewer filings than in December 2015. There were 25 new filings for Southwest Minnesota non-profit in the fourth quarter—ten fewer than one year earlier.
Based on preliminary data, employment of Southwest Minnesota residents declined by 3.2 percent over the year ending December 2016. 6,958 fewer Southwest Minnesota residents have jobs than did one year earlier. The regional unemployment rate was 4.2 percent in December, an increase from a 3.9 percent reading in December 2015. Nearly six hundred fewer initial claims for unemployment insurance were reported compared to year-ago levels in December—a 17.3 percent decrease. The Southwest Minnesota labor force contracted by 6,613 (a 2.9 percent decrease) over the year ending December 2016. Average weekly wages in Southwest Minnesota increased to $725 in the most recent reporting period (a $16 increase from one year earlier). Bankruptcies inched downward 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, employment increased, initial jobless claims fell, new business filings rose, and the relative cost of living declined. This was offset by a smaller labor force, a larger unemployment rate, a drop in the value of residential building permits, and lower goods-producing employment.
MacDonald, Richard A. and Banaian, King, "Southwest Minnesota Economic and Business Conditions Report - Fourth Quarter 2016" (2017). Southwest Minnesota Economic and Business Conditions Report. 12.