The Central Minnesota planning area is expected to experience economic growth that is slightly weaker than normal over the next several months according to predictions of the Central Minnesota Index of Leading Economic Indicators (LEI). The leading index fell by 2.41 points in the most recent period, with two components producing negative readings. Weaker new filings for business incorporation along with slowing residential building permits in the St. Cloud area helped tip the index down this quarter. Improvements in a general measure of statewide business conditions and a decrease in initial jobless claims in Central Minnesota had a positive impact on the LEI in the second quarter. An uptick in national durable goods orders also contributed favorably to the regional outlook.
There were 1,454 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the second quarter of 2016 — representing a 4.2 percent increase from one year ago. There were 163 new regional business incorporations in the second quarter, a 1.8 percent decrease from year ago levels. New limited liability company (LLC) filings in Central Minnesota increased 1.1 percent relative to the second quarter of 2015—rising to 792 in this year’s second quarter. New assumed names totaled 458 over the recent quarter—an increase of 14.8 percent compared to the same period in 2015. There were 41 new filings for Central Minnesota non-profit in the second quarter—seven fewer filings than one year ago.
Central Minnesota employment was 0.4 percent higher in June 2016 than it was one year earlier. Compared to one year ago, only 1,514 more residents of Central Minnesota now have jobs. The June regional unemployment rate was 4.5 percent—up from 4.3 percent one year earlier. Initial claims for unemployment insurance were 2.5 percent lower in June than they were in the same month last year. The Central Minnesota labor force continues to grow (rising 0.5 percent over the past year) and the average weekly wage jumped by 6.7% to $826 in the fourth quarter of 2015. Central Minnesota bankruptcies are starting to level out. The region’s 1,597 bankruptcies over the past twelve months are slightly higher than they were in last quarter’s report.
Economic performance in the St. Cloud area was mixed, with higher unemployment rates, less help wanted linage, weaker home prices and lower new business filings being offset by accelerating wages, a rising work week, higher employment, fewer jobless claims and a rising labor force. A recent survey of St. Cloud area business leaders was less optimistic about future business activity than one year earlier. It appears the economic expansion in St. Cloud (and Central Minnesota) has matured, so less rapid growth can be expected in future quarters.
Banaian, King and MacDonald, Richard A., "Central Minnesota Economic and Business Conditions Report - Second Quarter 2016" (2016). Central Minnesota Economic and Business Conditions Report. 10.