Publication Title
Northeast Minnesota Economic and Business Conditions Report
Document Type
Research Study
Publication Date
6-13-2019
Financial Year
2018
Abstract
Stronger 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). Three of the five components of the LEI increased as the overall index rose by 6.12 points in the third quarter. A higher number of Duluth metropolitan area residential building permits favorably impacted the leading index as did increased new filings of incorporation and lower initial jobless claims in the region. A decline in a general measure of statewide business conditions and a weaker purchasing managers’ manufacturing index weighed on this quarter’s leading index. The Northeast Minnesota LEI is now 2.6 percent higher than it was one year ago.
There were 567 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the third quarter of 2018 — representing a 15.5 percent improvement from one year earlier. Forty-two new regional business incorporations were filed in the third quarter—14.3 percent fewer than in the same period of 2017. New limited liability company (LLC) filings in Northeast Minnesota rose 18.9 percent to a level of 327. New assumed name filings increased 18.2 percent and there were 29 new filings for non-profit—5 more filings than in the third quarter of 2017.
Sixty-eight percent of new business filers in the Northeast Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year’s third quarter. Results of this voluntary survey indicate that 2.8 percent of new filers come from communities of color, while 8.5 percent of new filings come from veterans. 3.6 percent of new filers come from the disability community and only 2.3 percent of new filings are made by the immigrant community. Forty-four percent of new business filings in Northeast Minnesota in this year’s third 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 29 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, and other services. Employment levels at most new firms are between 0 and 5 workers, and more than half of those starting a new business consider this a part-time activity.
Northeast Minnesota employment was 1.3 percent higher than year ago levels in September. The regional unemployment rate was 2.8% (considerably lower than one year ago) and the labor force was largely unchanged, rising by only 0.2% from one year earlier. September 2018 initial claims for unemployment insurance were 17 percent lower than the same month last year. The job vacancy rate surged as labor shortages continue to plague the region. Annual bankruptcies in Northeast Minnesota declined slightly from one year ago.
Economic activity in the Duluth/Superior Metropolitan Statistical Area (MSA) was mixed. Northeast Minnesota’s largest market experienced a 0.8 percent increase in overall employment over the year ending September 2018 and manufacturing sector employment also rose. However, employment in the key education/health sector contracted. Average weekly work hours were flat, but average hourly earnings jumped by 7 percent over the past twelve months. The Duluth area unemployment rate fell to 2.8 percent, but the labor force was little changed. The value of residential building permits in the metropolitan area fell by nearly 20 percent.
Recommended Citation
Banaian, King and MacDonald, Richard, "Northeast Minnesota Economic and Business Conditions Report Third Quarter 2018" (2019). Northeast Minnesota Economic and Business Conditions Report. 20.
https://repository.stcloudstate.edu/qebcr_ne_mn/20
