Southwest Minnesota business conditions are expected to soften over the next several months according to the predictions of the St. Cloud State University (SCSU) Southwest Minnesota Index of Leading Economic Indicators (LEI). A reduction in Mankato area single family residential building permits and considerably higher initial jobless claims in the region helped drive this quarter’s leading index lower. A weakening in the rural outlook also made a negative contribution to the LEI this quarter. Increased new filings for incorporation and limited liability company (LLC) earlier in the year was the only component making a positive contribution to the index in the third quarter. The leading index has shown considerable volatility from one quarter to the next, so the third quarter’s negative reading (the LEI fell by 15.24 points) could easily be reversed in coming quarters.
There were 518 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the third quarter of 2015 — representing 8.3 percent fewer new filings than one year ago. There were 34 new regional business incorporations in the third quarter, a 27.7 percent decrease from one year ago. New LLC filings in Southwest Minnesota rose by 3.9 percent—increasing to 321 in the third quarter of 2015. New assumed names totaled 132 in this year’s third quarter—28.3 percent fewer filings than last year. There were thirty-one new filings for Southwest Minnesota non-profits in the third quarter—six more than one year ago.
Employment of Southwest Minnesota residents expanded by 1.4 percent over the year ending September 2015. 3,046 more Southwest Minnesota residents have jobs than did one year ago. The regional unemployment rate was 3.0 percent in September, an improvement on its 3.2 percent reading in September 2014. Initial claims for unemployment insurance rose by 339 from year-ago levels—a 31.6 percent increase. The Southwest Minnesota labor force rose by 2,738 (a 1.3 percent increase) over the year ending September 2015. The job vacancy rate fell in the second quarter of 2015, but remains elevated at 85.59 vacancies per 100 unemployed.
There was mixed economic performance in the Mankato/North Mankato Metropolitan Statistical Area (MSA)—the largest market in Southwest Minnesota. On the positive side, the workweek expanded, the unemployment rate fell, the value of residential building permits (these were primarily multi-unit permits) jumped, and the relative cost of living went down. However, this was offset by flat overall employment, a decline in average hourly earnings, a reduced labor force, higher initial jobless claims, and lower new business filings.
MacDonald, Richard A. and Banaian, King, "Southwest Minnesota Economic and Business Conditions Report - Third Quarter 2015" (2016). Southwest Minnesota Economic and Business Conditions Report. 7.