Continued strong economic growth in Southeast Minnesota is expected over the next several months according to the most recent prediction of the Southeast Minnesota Index of Leading Economic Indicators (LEI). After a quarter in which the LEI experienced a 2.34 point increase, the Southeast Minnesota leading index rose another 4.04 points in the fourth quarter of 2016. Three components of the LEI had positive readings in the current quarter. A decrease in initial claims for unemployment benefits, improvement in the Minnesota Business Conditions Index (which serves as a general measure of state business conditions) and stronger consumer sentiment helped lift this quarter’s index. A smaller number of residential building permits in Rochester as well as weaker new filings of incorporation and LLC in the Southeast Minnesota planning area were the only negative components of this quarter’s LEI.
There were 798 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the fourth quarter of 2016 — representing a 7.8 percent increase from one year ago. There were 65 new regional business incorporations in the fourth quarter, a 6.6 percent improvement from prior year levels. At a level of 493, fourth quarter new limited liability company (LLC) filings in Southeast Minnesota were 17.4 percent higher than the fourth quarter of 2015. With 205 filings, new assumed name activity was 7.2 percent lower than the same quarter in 2015. There were 35 new filings for Southeast Minnesota non-profits over the three months ending December 2016—three fewer filings than one year earlier.
Using preliminary data, employment of Southeast Minnesota residents fell by 1.9 percent over the year ending December 2016. Compared to December 2015, 5,183 fewer residents of Southeast Minnesota now have jobs. The regional unemployment rate was 3.6 percent in December, higher than the 3.1 percent level recorded one year earlier. Initial claims for unemployment insurance in December 2016 were basically unchanged from one year earlier and the Southeast Minnesota labor force contracted by 1.5 percent. The average weekly wage in Southeast Minnesota rose to $872 in the most recent reporting period—an increase of 2.5 percent over year earlier numbers. The planning area’s bankruptcies have begun to level out.
Data from the Rochester area—the largest market in Southeast Minnesota—were mixed, with an increase in overall employment (along with employment growth in the key health/education sector), higher new business filings, and a rise in the value of residential building permits having a positive impact on the outlook. On the negative side was a smaller labor force, a higher unemployment rate, increased initial jobless claims, and weaker manufacturing employment.
MacDonald, Richard A. and Banaian, King, "Southeast Minnesota Economic and Business Conditions Report - Fourth Quarter 2016" (2017). Southeast Minnesota Economic and Business Conditions Report. 12.