Economic conditions are expected to improve in Southwest Minnesota 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 rise in Mankato area single family residential building permits and fewer initial jobless claims in the fourth quarter helped drive the leading index higher. A weakening in the rural outlook made a negative contribution to the LEI this quarter. Lower new filings for incorporation and limited liability company (LLC) also served as a drag on the leading index in the fourth quarter.
There were 550 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the fourth quarter of 2015 — representing 2.3 percent fewer new filings than one year earlier. There were 61 new regional business incorporations in the fourth quarter, a 29.8 percent increase from one year ago. New LLC filings in Southwest Minnesota fell by 8.8 percent—decreasing to 291 in the fourth quarter of 2015. New assumed names totaled 163 in the fourth quarter—7.9 percent fewer filings than in December 2014. There were 35 new filings for Southwest Minnesota non-profits in the fourth quarter—15 more than one year earlier.
Employment of Southwest Minnesota residents expanded by 3.4 percent over the year ending December 2015. 7,171 more Southwest Minnesota residents have jobs than did one year earlier. The regional unemployment rate was 3.8 percent in December, an increase from a 3.7 percent reading in December 2014. Initial claims for unemployment insurance rose by 228 from year-ago levels in December—a 7.3 percent increase. The Southwest Minnesota labor force rose by 7,774 (a 3.5 percent increase) over the year ending December 2015 and average weekly wages finished the second quarter of 2015 at $703—a 2.6 percent rise from one year earlier. Southwest Minnesota bankruptcies started to inch up in the fourth quarter of 2015.
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, employment rose, the labor force expanded, and the relative cost of living went down. However, this was offset by a decline in average hourly earnings, a lower value of residential building permits, higher initial jobless claims, and lower new business filings.
MacDonald, Richard A. and Banaian, King, "Southwest Minnesota Economic and Business Conditions Report - Fourth Quarter 2015" (2016). Southwest Minnesota Economic and Business Conditions Report. 8.