Southwest Minnesota Economic and Business Conditions Report
 

Document Type

Research Study

Publication Date

6-2015

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). An increase in initial jobless claims earlier in 2014 combined with weakness in the general outlook for rural economies helped push down the fourth quarter 2014 LEI for the Southwest Minnesota planning area. While there has been a recent increase in new business filings of business incorporation and limited liability company (LLC) and higher residential building permits in the Mankato area, these indicators were insufficient to push the LEI higher in the fourth quarter. The Southwest Minnesota Index of Leading Economic Indicators declined by 4.15 points in the fourth quarter of 2014. The LEI for this part of the state is now 17.1 percent below its level at the end of 2013.

There were 563 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the fourth quarter of 2014 — representing 4.5 percent more new filings than one year earlier. There were 47 new regional business incorporations in the fourth quarter, a 21.7 percent decline from one year earlier. End of the year new LLC filings in Southwest Minnesota increased by 2.9 percent—rising to 319 in the fourth quarter of 2014. New assumed names totaled 177 in the fourth quarter—7.9 percent higher than the prior year. There were twenty new filings for Southwest Minnesota non-profits in the fourth quarter—a 300 percent increase from the final quarter of 2013.

Employment of Southwest Minnesota residents increased by 1.8 percent over the year ending December 2014. Three thousand eight hundred and sixty-nine more Southwestern Minnesotans had jobs at the end of 2014 than did at the end of the prior year. The regional unemployment rate was 3.6 percent in December, an improvement on its 4.3 percent reading in December 2013. Initial claims for unemployment insurance fell by 311 from year-earlier levels—a 15.7 percent decrease. The Southwest Minnesota labor force increased by 1.3 percent over the year ending December 2013 and average weekly wages increased 3 percent to $684 in the most recent reporting period.

There was improved economic performance in the Mankato/North Mankato area—the largest market in Southwest Minnesota—in the fourth quarter of 2014. The only negative indicators for Mankato were a reduced length of the workweek and a small increase in the relative cost of living.

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