Steady economic growth is expected in the Northwest Minnesota planning area over the next several months according to the predictions of the St. Cloud State University Northwest Minnesota Index of Leading Economic Indicators (LEI). Three of five index components increased in the most recent quarter as the LEI rose 3.03 points. A decrease in the Rural Mainstreet Index (which signals a more challenging macroeconomic environment for rural America) and a lower number of residential building permits in Fargo/Moorhead and Grand Forks/East Grand Forks were the only negative components in this quarter’s leading index. A rise in the number of new filings for LLC and incorporation in Northwest Minnesota, lower initial jobless claims throughout the region, and improved consumer sentiment all helped lift the LEI in the fourth quarter.
There were 1,033 new business filings with the Office of the Minnesota Secretary of State in Northwest Minnesota in the fourth quarter of 2017 — representing a 7.8 percent increase from one year ago. More than 21 percent fewer new regional business incorporations were recorded compared to last year’s fourth quarter. New LLC filings in Northwest Minnesota were up 7 percent from one year earlier—rising to 547. New assumed names totaled 328 in the fourth quarter—15.5 percent more filings than the same period in 2016. There were 59 new filings for Northwest Minnesota non-profit in the fourth quarter—twenty-two more filings than one year ago.
Sixty percent of new business filers in the Northwest Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year’s fourth quarter. Results of this voluntary survey indicate that about 4.3 percent of new filers come from communities of color. Approximately 7.6 percent of new filers in Northwest Minnesota are veterans. About 1.6 percent of new filers come from the disability community and 2.3 percent of new filings in Northwest Minnesota are made by the immigrant community. Forty-two percent of new business filings in Northwest Minnesota in this year’s fourth quarter were initiated by women. MBS results also show that most new business filers in Northwest Minnesota have between 0 and $10,000 in annual gross revenues (although 61 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Northwest Minnesota are construction, retail trade, real estate/rental/leasing, professional/scientific/technical and other services. Employment levels at most new firms are between 0 and 5 workers, and 45 percent of those starting a new business consider this a part-time activity.
Employment of Northwest Minnesota residents increased by 2.2 percent over the year ending December 2017. The regional unemployment rate was 5.0 percent in December, which was considerably lower than the 5.8 percent rate observed one year ago. Initial claims for unemployment insurance in December 2017 were 28.3 percent lower than one year earlier and the Northwest Minnesota labor force increased by 1.3 percent. Due to a statistical anomaly, the region’s average weekly wages fell in the third quarter of 2017 compared to one year earlier. Northwest Minnesota’s total bankruptcies were higher than one year ago.
Economic performance in the Fargo/Moorhead Metropolitan Statistical Area (MSA) was mostly favorable in the past quarter. This MSA tallied gains in overall employment (as well as job gains in the key mining/logging/construction and manufacturing sectors), lower initial jobless claims, a rise in the regional workforce, increased average hourly earnings, and a lower unemployment rate. The area did experience reduced valuation of residential building permits, a decrease in average weekly work hours, and a higher relative cost of living. Economic activity in the Grand Forks/East Grand Forks MSA was mixed in the fourth quarter. Lower overall employment (including a decrease in mining/logging/construction employment), a falling labor force, lower weekly work hours, an increase in the relative cost of living, and declining average hourly earnings had a negative impact on the region’s economic outlook. A lower unemployment rate, declining initial jobless claims, and rising manufacturing employment contributed favorably to the area’s economic performance.
Banaian, King and MacDonald, Richard A., "Northwest Minnesota Economic and Business Conditions Report - Fourth Quarter 2017" (2017). Northwest Minnesota Economic and Business Conditions Report. 16. http://repository.stcloudstate.edu/qebcr_nw_mn/16