Southwest Minnesota Economic and Business Conditions Report
 

Document Type

Research Study

Publication Date

1-2015

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). A recent decline in jobless claims in Southwest Minnesota was the only LEI component with a favorable outlook. Pushing down the regional index was weakness in the general outlook for rural economies and a decrease in Mankato area residential building permits. The SCSU Southwest Minnesota Index of Leading Economic Indicators decreased by 4.16 points in the third quarter of 2014 and is now 1.4 percent lower than one year ago.

There were 565 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the third quarter of 2014 — representing 12.1 percent more new filings than one year ago. There were 47 new regional business incorporations in the third quarter, a 2.1 percent reduction from one year ago. Over the past 12 months, new LLC filings in Southwest Minnesota increased by 8.8 percent—rising to 309 in the third quarter of 2014. New assumed names totaled 184 in this year’s third quarter—25.2 percent higher than last year. There were twenty-five new filings for Southwest Minnesota non-profits in the third quarter—a 150 percent increase from one year ago.

Employment of Southwest Minnesota residents increased by 0.5 percent over the year ending September 2014. One thousand sixty-one more Southwestern Minnesotans have jobs than one year ago. The regional unemployment rate was 3.2 percent in September, an improvement on its 3.9 percent reading in September 2013. Initial claims for unemployment insurance fell by 324 from year-ago levels—a 21.6 percent decrease. The Southwest Minnesota labor force continues to fall and job vacancies per 100 unemployed have increased. The annual level of regional bankruptcies is at its lowest point since mid-2007.

There was mixed economic performance in the Mankato/North Mankato area—the largest market in Southwest Minnesota. On the positive side, overall employment grew at an annual rate of 3.4 percent (led by rapid growth in goods-producing employment), jobless claims fell, total business filings increased, and the unemployment rate declined. Showing weakness was Mankato area residential building permits and average weekly work hours. Average hourly earnings were nearly unchanged from one year earlier.

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