Business conditions in Northeast Minnesota are expected to soften over the next several months according to the predictions of the Northeast Minnesota Index of Leading Economic Indicators (LEI). Four of the five components of the LEI declined in this year’s first quarter as the overall index fell by 16.49 points. This marks two consecutive quarters in which the LEI has been in negative territory, suggesting slower future growth in the Northeast Minnesota planning area. Reduced initial jobless claims in the region are the one bright spot in this quarter’s index. A recent decline in residential building permits in the Duluth/Superior area caused the greatest drag on the first quarter LEI. Also contributing to the weaker outlook was a decline in a general measure of state business conditions, lower filings for business incorporation over the past several months, and a decline in a supply managers’ survey index.
There were 547 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the first quarter of 2015 — representing a 1.5 percent improvement from one year ago. Fifty-five new regional business incorporations were filed in the first quarter, a 1.9 percent increase from 2014. New limited liability company (LLC) filings in Northeast Minnesota fell by 2.3 percent to 260. New assumed names totaled 206 in this year’s first quarter—a 7.3 percent increase from the third quarter of 2014. There were 26 new filings for Northeast Minnesota non-profit in the 2015 first quarter—one fewer than one year earlier.
Northeast Minnesota employment was 0.6 percent higher than year earlier levels in March. The regional unemployment rate fell to 6.1 percent as the Northeast Minnesota labor force contracted by 0.4 percent. The regional labor force is now 2,943 lower than in March 2010. April 2015 initial claims for unemployment insurance were 200 less than the year earlier (a 13.9 percent decline) and the level of job vacancies has surged in this region.
Economic performance in the Duluth/Superior Metropolitan Statistical Area (MSA) is mixed. Northeast Minnesota’s largest market experienced a 0.4 percent rise in overall employment over the year ending March 2015, but the key sectors of manufacturing and education/health shed jobs. The length of the workweek fell, but average hourly earnings rose. The area unemployment rate fell by one percent to 5.6 percent, but the labor force fell by 0.8 percent. Residential building permits were 38.1 percent lower in March than one year earlier.
Banaian, King and MacDonald, Richard A., "Northeast Minnesota Economic and Business Conditions Report - First Quarter 2015" (2015). Northeast Minnesota Economic and Business Conditions Report. 4.