St. Cloud Area Quarterly Business Report

Document Type

Research Study

Publication Date

9-13-2020

Abstract

While some sectors of the local economy continue to be devastated by the COVID-19 pandemic, many area firms are now beginning to recuperate from this spring’s shockwaves. Overall local employment was 3.1 percent lower in July 2020 than it was one year earlier, but this is a clear improvement from what was seen in last quarter’s St. Cloud Area Quarterly Business Report (at which time we reported an 11.5 percent year-over-year decline in area employment). In addition, published job losses in the Twin Cities (and across the state) are considerably worse than what is seen locally. For example, Twin Cities employment declined 8.7 percent over the year ending July 2020 (and state employment dropped 8.5 over the same period). These relatively stronger numbers in the St. Cloud labor market are little comfort to those firms in the leisure & hospitality sector, where local employment fell 23.1 percent over the past twelve months. The information and “other services” sectors, along with the local government sub-sector, also experienced double digit percentage employment declines over the year ending July 2020. Combined, these four sectors account for 17.3 percent of overall area employment. Other key local sectors are faring better than three months ago. For example, employment in the education/health sector was one percent higher in July 2020 than it was one year earlier (these numbers do not reflect the closure of the Health Partners Central Minnesota Clinic at the end of August). In addition, retail trade employment grew 9.8 percent over the year ending July 2020. Mining/logging/construction employment was also higher locally. These three growth sectors account for more than 40 percent of local jobs.

The St. Cloud Index of Leading Economic Indicators was down 0.1% in the quarter and down 0.9% over the last year. Current business activity at surveyed firms was improved from three months ago (when reported activity was weaker than at any time over the 22 years that the St. Cloud Area Business Outlook Survey has been administered). For example, nearly half of surveyed firms report an increase in business activity over the past three months and more than one-third of firms indicate increased capital expenditures in the current quarter. The future outlook of surveyed firms is weaker than usual for the August survey but, on balance, area firms still expect improved business conditions by the beginning of next year. In special questions, nearly half of surveyed firms expect the local recession to continue into 2021—few firms think the local recession will be over by the end of 2020. In other special questions, area business leaders share any positive long-term impact that COVID-19 has had on their firms. They also weigh in on the extent to which the pandemic is likely to influence election outcomes. Finally, firms describe ways in which they are likely to be impacted by the form taken of K-12 school re-openings.

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