Twin Cities Minnesota Economic and Business Conditions Report
 

Publication Title

Twin Cities Minnesota Economic and Business Conditions Reports

Document Type

Research Study

Publication Date

1-17-2019

Financial Year

2018

Abstract

Steady economic growth is expected to continue in the Twin Cities planning area according to the predictions of the Twin Cities Index of Leading Economic Indicators (LEI). The Twin Cities LEI decreased 1.80 points in the third quarter of 2018 as three of five index components registered negative values. A decrease in the Minnesota Business Conditions Index—a general measure of statewide business conditions—was the primary factor causing the negative reading of this quarter’s LEI. Some weakness in the initial jobless claims and Federal Reserve Bank of Philadelphia Minnesota Leading Economic Indicators Index series also weighed on the Twin Cities LEI. A pickup in residential building permits in the Twin Cities metropolitan area and higher new filings of incorporation and LLC in the region each had a favorable impact on the Twin Cities LEI.

There were 10,658 new business filings with the Office of the Minnesota Secretary of State in the seven-county metro area in the third quarter of 2018—representing a 4.3 percent increase from one year ago. 1,303 new regional business incorporations were tallied in the Twin Cities in the third quarter—4.4 percent fewer than year ago levels. Third quarter new LLC filings rose to 7,082 in the seven-county metro area—an 8.8 percent increase compared to the third quarter of 2017. New assumed names were 4.9 percent lower in the third quarter and there were 26 more new non-profit filings in the Twin Cities than one year ago.

Sixty percent of new business filers in the Twin Cities planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year’s third quarter. Results of this voluntary survey indicate that 16.3 percent of new filers come from communities of color. 4.7 percent of new filings are veterans. 2.1 percent of new filers come from the disability community and 9.8 percent of new filings are made by the immigrant community. Nearly thirty-seven percent of new business filings in the Twin Cities planning area in this year’s third quarter were initiated by women. MBS results also show that most new business filers in the Twin Cities have between 0 and $10,000 in annual gross revenues (although 593 new filers have revenues in excess of $50,000). The most popular industries for new businesses in the Twin Cities are professional/scientific/technical, retail trade, real estate/rental/leasing, construction, and other services. Employment levels at most new firms are between 0 and 5 workers, and 44.1 percent of those starting a new business consider this a part-time activity.

Twin Cities planning area employment increased by 0.5 percent over the year ending September 2018. At 2.2 percent, the planning area’s unemployment rate was considerably lower than one year earlier. Initial claims for unemployment insurance were lower than year ago levels, falling by 7.2 percent to 4,906. The rate of job vacancies per 100 unemployed workers was 186.3 as the regional (and statewide) labor shortage continued to plague Twin Cities firms. The planning area’s labor force contracted by 0.1 percent over the year ending September 2018. Average hourly earnings and average weekly work hours rose for private sector workers in the 16-county Minneapolis-St. Paul MSA over the year ending September 2018 and the relative cost of living rose in Minneapolis, but declined in St. Paul. The number of annual bankruptcies fell in the Twin Cities.

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