Northwest Minnesota business conditions are expected to improve over the next several months according to the predictions of the St. Cloud State University (SCSU) Northwest Minnesota Index of Leading Economic Indicators (LEI). The macroeconomic environment for rural America has improved and consumer sentiment has strengthened in recent months. A rise in new business formation along with an increase in residential building permits in Northwest Minnesota’s two major metropolitan areas also helped drive the LEI higher in the second quarter. The SCSU Northwest Minnesota Index of Leading Economic Indicators is now 1.4 percent above its level one year ago as it approaches an all-time high.
There were 1,089 new business filings with the Office of the Minnesota Secretary of State in Northwest Minnesota in the second quarter of 2014 — representing a 3.4 percent increase from one year ago. There were 124 new regional business incorporations in the first quarter, a 4.2 percent increase over year ago levels. Over the past 12 months, new limited liability company (LLC) filings in Northwest Minnesota were up 3.7 percent — increasing to 539 in the second quarter of 2014. New assumed names totaled 385 in this year’s second quarter — a rise of 0.5 percent from the second quarter of 2014. There were 41 new filings for Northwest Minnesota nonprofits in the second quarter — 32.3 percent more filings than one year ago.
Employment of Northwest Minnesota residents increased by 1.1 percent over the year ending June 2014. The regional unemployment rate was 4.6 percent in June, an improvement on its 5.3 percent reading one year ago. Initial claims for unemployment insurance were 235 lower (a decrease of 13.5 percent) than in June 2013 and average weekly wages in the Northwest Minnesota planning area increased by 2 percent (to $699 ) from the fourth quarter of 2012 to the fourth quarter of 2013.
The Fargo/Moorhead Metropolitan Statistical Area (MSA) grew very rapidly over the past quarter. This MSA tallied strong gains in employment, average hourly earnings and residential building permits. Lower initial jobless claims and a declining unemployment rate further highlight strong performance in the Fargo/Moorhead area. By comparison, economic performance in the Grand Forks/East Grand Forks MSA was much more moderate. Flat employment levels, a declining labor force, and a reduction in the average length of the workweek suggest a much slower pace of activity in this northern MSA. The Grand Forks/East Grand Forks area does report lower unemployment rates, increased hourly earnings, and substantially higher residential building permit valuation.
MacDonald, Richard A. and Banaian, King, "Northwest Minnesota Economic and Business Conditions Report, Second Quarter 2014" (2014). Northwest Minnesota Economic and Business Conditions Report. 2.