Business conditions in Northeast Minnesota are expected to slow over the next several months according to a variety of economic indicators. The Northeast Minnesota Index of Leading Economic Indicators (LEI) fell by 1.47 points in the fourth quarter, although the level of the LEI is considerably above its 2013 value. An improvement in initial jobless claims and higher Duluth/Superior residential building permits contributed favorably to the LEI. Recent weakness in the Institute of Supply Management’s Purchasing Managers Index for manufacturing, slower new business incorporations earlier in 2014, and a deterioration in a general measure of state business conditions were negative components of the fourth quarter LEI.
There were 478 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the fourth quarter of 2014 — representing a 2.4 percent improvement from one year earlier. There were 69 new regional business incorporations in the fourth quarter, a 64.3 percent increase from the same quarter in 2013. Quarter four new limited liability company (LLC) filings in Northeast Minnesota jumped to 259—a 7.9 percent increase from one year earlier. New assumed names totaled 128 in the fourth quarter—an 18.5 percent decrease from the fourth quarter of 2013. There were 22 new filings for Northeast Minnesota non-profits in the 2014 fourth quarter—six fewer than one year earlier.
Northeast Minnesota employment was 0.4 percent higher than year earlier levels in December. The regional unemployment rate fell to 4.7 percent as the Northeast Minnesota labor force experienced a 1.1 percent annual decline. The regional labor force is now 3,830 lower than in December 2010. January 2015 initial claims for unemployment insurance were considerably lower than in January 2014 and average weekly wages were basically unchanged from 2013.
Data from the Duluth/Superior Metropolitan Statistical Area (MSA) were mixed. Northeast Minnesota’s largest market experienced a 0.6 percent annual increase in overall employment in 2014, but the key sectors of manufacturing and education/health shed jobs. While average hourly earnings expanded, the length of the workweek dropped. The Duluth area unemployment rate dropped from 5.7 percent in December 2013 to 4.3 percent one year later, but this was accompanied by a 0.9 percent decline in the area labor force. The value of residential building permits rose by 31.2 percent from December 2013 to December 2014, but area building permits are still well below their long term average.
Banaian, King and MacDonald, Richard A., "Northeast Minnesota Economic and Business Conditions Report - Fourth Quarter 2014" (2015). Northeast Minnesota Economic and Business Conditions Report. 5.