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Q2 Regional Reports Predict Steady Statewide Economic Growth

September 21, 2016

Increased new business filings in several planning areas and higher earnings per hour in private sector highlight regional growth

SAINT PAUL — Regional economies across Minnesota are predicted to experience steady economic growth over the next several months, according to new economic reviews and forecasts released today by Secretary of State Steve Simon and the St. Cloud State University School of Public Affairs Research Institute.

The 2016 second quarter Minnesota Regional Economic and Business Conditions Reports show all six planning areas (metro, central, northeast, northwest, southeast, and southwest) enjoying economic growth in the coming months. However, the central and northwest planning areas are expected to see slower growth than normal.

Across the state there was growth in payrolls, higher earnings per hour, and more average weekly hours worked in the private sector over the last year. To view each region’s full report online, click here.

“I’ve met with small business owners and city officials throughout the state who have said these reports add significant value to understanding their region’s current and future economic outlook,” said Secretary Simon. “My goal is to make it as easy as possible for small business owners to set up and run their businesses, and these reports are an important part of that effort.”

The reports were developed by the St. Cloud State University School of Public Affairs Research Institute, in partnership with the Office of the Minnesota Secretary of State. The Secretary of State’s Office reviews and approves all Minnesota business filings, and commissioned the reports to provide a perspective on business conditions and deliver a tool for entrepreneurs to better understand their region. There is one quarterly report for each of six statewide planning areas. The economic reviews and forecasts are based on a comprehensive examination of several datasets, including business filings.

“Leading economic indicators rose in the seven-county metropolitan Minneapolis-St. Paul planning area in the second quarter, but fell in four of the five areas of greater Minnesota,” said King Banaian, report co-author and dean of the School of Public Affairs at St. Cloud State University. “Only southwestern Minnesota was positive besides the Twin Cities. A softening of building permits contributed to declines in many of the indicators. Business filings that are relevant to leading indicators were up in the Northeast, Southeast and Southwest planning areas and down elsewhere.”

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Twin Cities
The Twin Cities economy is expected to see a steady pace of growth over the next several months, according to a variety of economic indicators. The Twin Cities Index of Leading Economic Indicators (LEI) was essentially unchanged in the second quarter, falling by just 0.37 points, and is now 1.6 percent higher than its level one year ago. Three of the five index components increased in the second quarter.

There were 10,186 new business filings with the Office of the Minnesota Secretary of State in the seven-county metro area in the second quarter of 2016 — representing a 1.2 percent decrease from one year ago.

Employment increased by 0.8 percent over the year ending June 2016. The regional unemployment rate was 3.7 percent in June, a slight increase from its reading one year earlier (3.6 percent).

Central
Central Minnesota’s economy is expected to experience growth that is slightly weaker than normal over the next several months, according to a variety of economic indicators. The Central Minnesota LEI fell by 2.41 points in the second quarter, after rising a revised 1.55 points in the first quarter of 2016. Two components produced negative readings in the second quarter. Compared to last year, the LEI is now 1.95 percent lower.

There were 1,454 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the second quarter of 2016 — representing a 4.2 percent increase from one year ago.

Employment increased by 0.4 percent over the year ending June 2016. Compared to one year ago, 1,514 more residents of Central Minnesota now have jobs. The regional unemployment rate was 4.5 percent in June, which is up from 4.3 percent one year earlier.

Northeast
Economic conditions in Northeast Minnesota are expected to see modest improvement over the next several months, according to a variety of economic indicators. The Northeast Minnesota LEI rose by 0.53 points in the second quarter, after a revised 1.67-point increase in the first quarter. The LEI is now 2.5 percent below its level one year ago.

There were 584 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the second quarter of 2016 — representing a 4.5 percent increase from one year ago.

Employment was 0.8 percent lower than year ago levels in June. The regional unemployment rate was 6.2 percent, a large increase from 5.3 percent one year ago, as the labor force remained basically unchanged.

Northwest
Northwest Minnesota’s economy is expected to grow at a slower pace than normal over the next several months, according to a variety of economic indicators. The Northwest Minnesota LEI decreased by 3.66 points in the second quarter, after three of the five components of the leading index fell, and is 8.4 percent below its level one year ago.

There were 1,088 new business filings with the Office of the Minnesota Secretary of State in Northwest Minnesota in the second quarter of 2016 — representing a 3.6 percent decrease from one year ago.

Employment decreased by 0.6 percent over the year ending June 2016. The regional unemployment rate was 4.5 percent in June, which was higher than the 4.3 percent rate observed one year ago.

Southeast
Southeast Minnesota is expected to see steady economic growth over the next several months, according to a variety of economic indicators. The Southeast Minnesota LEI fell by 3.18 points in the second quarter of 2016. The fall in the LEI was caused by a sharp rise in initial claims for unemployment benefits in recent months, but the other four index components had positive readings. The LEI is now 5.3 percent below its level of one year earlier.

There were 911 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the second quarter — representing a 5.4 percent increase from one year ago.

Employment fell by 0.4 percent over the year ending June 2016. Compared to June 2015, 1,219 fewer residents of Southeast Minnesota now have jobs. The regional unemployment rate was 3.6 percent in June, slightly higher than the 3.5 percent level recorded in the year earlier period.

Southwest
Southwest Minnesota’s economy is expected to see a steady improvement over the next several months, according to a variety of economic indicators. The Southwest Minnesota LEI increased by 1.27 points in the second quarter of 2016, and is now 1.4 percent higher than one year ago.

There were 697 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the second quarter — representing 7.9 percent increase in new filings than one year ago.

Employment decreased by 1.2 percent over the year ending June 2016. 2,545 fewer Southwest Minnesota residents have jobs than did one year ago. The regional unemployment rate was 4.1 percent in June, an increase on its 3.8 percent reading in June 2015.

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