Southwest Minnesota Economic and Business Conditions Report
 

Document Type

Research Study

Publication Date

10-2014

Abstract

Southwest Minnesota business conditions are expected to slow over the next several months according to the predictions of the St. Cloud State University (SCSU) Southwest Minnesota Index of Leading Economic Indicators (LEI). Despite improvements in the general outlook for rural economies, an increase in new regional business formation and rising Mankato area residential building permits, the LEI is little changed from its strong reading in this year’s first quarter. Holding back the regional economic outlook is a recent rise in initial jobless claims in the Southwest Minnesota planning area. The SCSU Southwest Minnesota Index of Leading Economic Indicators increased by 0.42 points in the second quarter of 2014 and is now only 0.8 percent higher than one year ago.

There were 594 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the second quarter of 2014 — representing 2.6 percent fewer new filings than one year ago. There were 53 new regional business incorporations in the second quarter, a 14.5 percent decrease over a year ago. Over the past 12 months, new LLC filings in Southwest Minnesota increased by 12.5 percent — rising to 360 in the second quarter of 2014. New assumed names totaled 153 in this year’s second quarter — a 21.1 percent reduction from second quarter 2013. There were 28 new filings for Southwest Minnesota nonprofits in the first quarter — a 700 percent increase from one year ago.

Employment of Southwest Minnesota residents increased by 0.2 percent over the year ending June 2014. Only 337 more Southwestern Minnesotans have jobs than one year ago. The regional unemployment rate was 4.3 percent in June, an improvement on its 4.7 percent reading in June 2013. Initial claims for unemployment insurance increased by 113 from year-ago levels — a 7.4 percent increase. Average weekly wages rose by 3.4 percent in 2013, the last period for which this information is available. The Southwest Minnesota labor force fell over the recent year.

Compared to the rest of the region, economic performance in the Mankato/North Mankato area — the largest market in Southwest Minnesota — was particularly strong in the second quarter. With above average employment growth, a declining unemployment rate, an acceleration in the value of residential building permits, a rising labor force and rising average hourly earnings, the Mankato/North Mankato Metropolitan Statistical Area provided a needed lift to the Southwest Minnesota regional economy.

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