St. Cloud Area Quarterly Business Report, Vol. 23, No. 4
The economic recovery from the unrelenting COVID shock continues in the St. Cloud area as firms report an optimistic future outlook and employment grows. However, underlying this optimism are increases in wages, prices, capital expenditures, and worker shortages that may prove unsustainable in a post-COVID economy. Strong future optimism by surveyed firms is restrained by the reality that monetary and fiscal stimulus is abating perhaps faster than the pandemic.
Data released by the Minnesota Department of Employment and Economic Development (DEED) indicate St. Cloud area employment increased 2% over the twelve months ending October 2021, but still 4,493 (4%) below its level two years ago. Recent job growth has been generally positive across most local sectors, but the education/health and financial activities sectors saw a reduction in workers employed over the past twelve months. In addition, while employment in the leisure/hospitality sector has increased over the past year, it is still 18.9% below its level in October 2019, almost twice the statewide decline in that industry.
The St. Cloud Index of Leading Economic Indicators fell 2.4% from its record high three months ago but is still 1.3% higher in the last year as the local economy continues to rebound from the trough of the recession that ended in April 2020. Business activity at surveyed firms was solid over the past quarter. 62% of surveyed firms report an increase in business activity over the past three months and only 18% of firms experienced a decrease in activity over the past quarter. The future outlook of surveyed firms is very strong as 71% of survey respondents expect improved business conditions over the next six months and only 7% of firms anticipate decreased activity.
In our first special question, 80% of surveyed firms report employee engagement is a “high priority” or “essential”. In a second special question, 44% of firms indicate they have on employees who are currently working regularly from home. 29% of firms have up to one-fourth of their workforce working from home and another 11% of firms report 26-50% of their employees are regularly telecommuting. For those firms with employees who work from home, the greatest share of workers are home 5 days per week. A similar percentage of workers are home three days per week. Finally, 18% of those firms that have employees working from home expect this to be a permanent arrangement. Another 13% of firms expect telecommuting will end within the next 12 months. We note that virtually all survey responses were collected prior to the recent news of the Omicron variant of COVID-19.
Banaian, King and Macdonald, Richard, "St. Cloud Area Quarterly Business Report, Vol. 23, No. 4" (2021). St. Cloud Area Quarterly Business Report. 93.