Increased economic growth in Southwest Minnesota is expected over the next several months according to the predictions of the St. Cloud State University Southwest Minnesota Index of Leading Economic Indicators (LEI). Three of four LEI components were positive in the first quarter. An improvement in the rural outlook and lower jobless claims contributed favorably to the LEI in the first quarter. An increase in residential building permits in the Mankato MSA also helped lift the leading index. After falling 2.77 points in last year’s fourth quarter, the Southwest Minnesota LEI rose by 4.68 points in the current quarter. The index has now increased by 2.8% over the past twelve months.
There were 787 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the first quarter of 2017 — representing 18.3 percent more new filings than one year ago. There were 61 new regional business incorporation filings in the first quarter, an 8.9 percent increase from last year’s first quarter. New LLC filings in Southwest Minnesota rose 14.1 percent from one year earlier and new assumed names climbed to 236—a 24.2 percent increase compared to March 2016. There were 44 new filings for Southwest Minnesota non-profit in the first quarter—16 more than one year earlier.
Sixty percent of new business filers in the Southwest Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year’s first quarter. Results of this voluntary survey indicate that a little over 3 percent of new filers come from communities of color. Nearly 6 percent of new businesses filings are from veterans. About 1.5 percent of new filers come from the disability community and nearly 3 percent of new filings are made by the immigrant community. Thirty-five percent of new business filings in Southwest Minnesota in this year’s first quarter were initiated by women. MBS results also show that most new business filers in Southwest Minnesota have between 0 and $10,000 in annual gross revenues (although 64 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Southwest Minnesota are agriculture, construction, retail trade, and other services. Employment levels at most new firms are between 0 and 5 workers, and 44 percent of those starting a new business consider this a part-time activity.
Employment of Southwest Minnesota residents declined by 1 percent over the year ending March 2017. The regional unemployment rate was 4.7 percent in March, a decrease from a 4.9 percent reading in March 2016. Nearly 150 fewer initial claims for unemployment insurance were reported compared to year-ago levels in March--a 12.6 percent decrease. The Southwest Minnesota labor force contracted by 1.2 percent over the year ending March 2017. Job vacancies remain elevated in the region. Bankruptcies continued to fall in Southwest Minnesota.
Economic performance in the Mankato/North Mankato Metropolitan Statistical Area (MSA)—the largest market in Southwest Minnesota—was mostly favorable in the most recent quarter. Initial jobless claims fell, new business filings rose, the relative cost of living declined, the value of residential building permits surged, the unemployment rate fell, average weekly work hours increased, and hourly earnings rose. The only negative readings in the Mankato MSA in the first quarter were from a decline in employment and a reduction in the size of its labor force.
MacDonald, Richard A. and Banaian, King, "Southwest Minnesota Economic and Business Conditions Report - First Quarter 2017" (2017). Southwest Minnesota Economic and Business Conditions Report. 13.