Publication Title
Northeast Minnesota Economic and Business Conditions Report
Document Type
Research Study
Publication Date
6-13-2019
Financial Year
2018
Abstract
A considerable slowing of economic growth in Northeast Minnesota is expected over the next several months according to the predictions of the Northeast Minnesota Index of Leading Economic Indicators (LEI). All five components of the LEI decreased as the overall index plummeted by 15.28 points in the fourth quarter. A smaller number of Duluth metropolitan area residential building permits, a decline in a general measure of statewide business conditions, a weaker purchasing managers’ manufacturing index, and rising regional initial jobless claims all weighed on this quarter’s leading index. The Northeast Minnesota LEI is now 10.3 percent lower than it was one year ago.
There were 535 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the fourth quarter of 2018 — representing a 5.5 percent improvement from one year earlier. Forty-seven new regional business incorporations were filed in the fourth quarter—11.9 percent more than in the same period of 2017. New limited liability company (LLC) filings in Northeast Minnesota rose 5 percent to a level of 315. New assumed name filings increased 2.8 percent and there were 26 new filings for non-profit—four more filings than in the fourth quarter of 2017.
Sixty-four percent of new business filers in the Northeast Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in the fourth quarter. Results of this voluntary survey indicate that 5 percent of new filers come from communities of color, while 8.2 percent of new filings come from veterans. 2.6 percent of new filers come from the disability community and only 1.5 percent of new filings are made by the immigrant community. Fortyfour percent of new business filings in Northeast Minnesota in the fourth quarter were initiated by women. MBS results also show that most new business filers in Northeast Minnesota have between 0 and $10,000 in annual gross revenues (although 39 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Northeast Minnesota are construction, retail trade, professional/scientific/technical, real estate/rental/leasing, arts/entertainment/ recreation, and other services. Employment levels at most new firms are between 0 and 5 workers, and nearly half of those starting a new business consider this a part-time activity.
Northeast Minnesota employment was 2.2 percent higher than year ago levels in December. The regional unemployment rate was 4.5% (considerably lower than one year ago) and the labor force rose by 1.7 percent from one year earlier. December 2018 initial claims for unemployment insurance were 6.3 percent higher than the same month last year. Average weekly wages surged as labor shortages put upward pressure on regional labor costs. Annual bankruptcies in Northeast Minnesota were lower than one year ago.
Economic activity in the Duluth/Superior Metropolitan Statistical Area (MSA) was mixed. Northeast Minnesota’s largest market experienced a small 0.1 percent increase in overall employment over the year ending December 2018. Manufacturing sector employment rose, but employment in the key education/health sector was flat. Average weekly work hours declined, but average hourly earnings jumped by 8.6 percent over the past twelve months. The Duluth area unemployment rate fell to 3.9 percent, but the labor force was little changed. The value of residential permits in the Duluth metropolitan area fell by 76.5 percent.
Recommended Citation
Banaian, King and MacDonald, Richard, "Northeast Minnesota Economic and Business Conditions Report Fourth Quarter 2018" (2019). Northeast Minnesota Economic and Business Conditions Report. 19.
https://repository.stcloudstate.edu/qebcr_ne_mn/19
