Southwest Minnesota Economic and Business Conditions Report
 

Document Type

Research Study

Publication Date

9-2015

Abstract

Southwest Minnesota business conditions are expected to be steady 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 Mankato area residential building permits in the first part of the year and an improvement in the rural outlook made positive contributions to the LEI in the second quarter. Higher initial jobless claims earlier in the year had a negative impact on the index. Also contributing unfavorably to this quarter’s LEI was weaker new business filings earlier this year. The LEI for the second quarter was basically neutral, declining by a modest 0.85 points. This is much improved from the first quarter reading of the index (when it fell 22.22 points). The Southwest LEI is now 3.5 percent below last year’s level.

There were 646 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the second quarter of 2015 — representing 8.8 percent more new filings than one year ago. There were 59 new regional business incorporations in the second quarter, an 11.3 percent increase from one year ago. New LLC filings in Southwest Minnesota fell by 0.3 percent—declining to 359 in the second quarter of 2015. New assumed names totaled 200 in this year’s second quarter—30.7 percent more than last year. There were twenty-eight new filings for Southwest Minnesota non-profits in the second quarter—unchanged from one year ago.

Employment of Southwest Minnesota residents jumped 4.1 percent over the year ending June 2015. 8,539 more Southwest Minnesota residents have jobs than did one year ago. The regional unemployment rate was 3.9 percent in June, an improvement on its 4.1 percent reading in June 2014. Initial claims for unemployment insurance fell by 409 from year-ago levels—a 25 percent decrease. The Southwest Minnesota labor force increased by 8,519 over the year ending June 2015 and average weekly wages increased 2.2 percent to $751 in the most recent reporting period.

There was mixed economic performance in the Mankato/North Mankato Metropolitan Statistical Area (MSA)—the largest market in Southwest Minnesota. On the positive side, overall employment grew at an annual rate of 1 percent, the unemployment rate fell, the labor force expanded, and nearly all categories of new business filings rose. Showing weakness was Mankato area residential building permits, average weekly work hours, and average hourly earnings. Initial jobless claims in the Mankato area were also higher and the relative cost of living in the MSA appeared to rise.

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