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Q3 Economic Regional Reports Predict Slower Growth

December 22, 2016

Business filings increased in five of six planning areas statewide

SAINT PAUL — Most regional economies across Minnesota are predicted to experience slower 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 third quarter Minnesota Regional Economic and Business Conditions Reports show four of six planning areas—metro, central, northeast, northwest—witnessing slower growth in the coming months. Two planning areas—southeast and southwest—are expected to see an increase or normal growth, respectively.

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. Business filings also increased in five of the six planning areas statewide. To view each region’s full report online, click here.

“These economic reports are designed to help local businesses understand and prepare for the ups and downs of their local economies,” said Secretary Simon. “Business leaders and city officials have said these reports provide useful information to understanding not only their region’s economic outlook, but also that of the entire state. I encourage all small business owners, entrepreneurs, and consumers to take advantage of this resource.”

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 were strongest in the Southeast and Southwest planning areas,” said King Banaian, report co-author and dean of the School of Public Affairs at St. Cloud State University. “The Central planning area weakened slightly but is still up year-over-year. There continues to be weakness in Northeast and Northwest planning areas, and the seven-county Twin Cities area has weakened somewhat too in recent quarters.”

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Twin Cities
The Twin Cities economy is expected to see a slower pace of economic growth over the next several months, according to a variety of economic indicators. The Twin Cities Index of Leading Economic Indicators (LEI) fell 5.70 points in the third quarter after a neutral reading in the previous quarter. Four of the five index components decreased in the third quarter.

There were 9,196 new business filings with the Office of the Minnesota Secretary of State in the seven-county metro area in the third quarter of 2016 — representing a 5 percent decrease from one year ago.

Employment decreased by 0.4 percent over the year ending September 2016. The regional unemployment rate was 3.2 percent in September, a slight increase from its reading one year earlier (3.1 percent).

Central
Central Minnesota’s economy is expected to experience a slowing of economic growth over the next several months, according to a variety of economic indicators. The Central Minnesota LEI fell by 2.90 points in the third quarter. Three components produced negative readings in the third quarter. Compared to last year, the LEI is now 5.21 percent higher.

There were 1,191 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the third quarter of 2016 — representing a 0.8 percent increase from one year ago.

Employment decreased by 0.7 percent over the year ending September 2016. Compared to one year ago, 2,567 fewer residents of Central Minnesota now have jobs. The regional unemployment rate was 3.4 percent in September, which is up from 3.2 percent one year earlier.

Northeast
Economic conditions in Northeast Minnesota are expected to see a deceleration over the next several months, according to a variety of economic indicators. The Northeast Minnesota LEI fell by 1.36 points in the third quarter, with two of the five components experiencing an increase.

There were 479 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the third quarter of 2016 — representing a 2.6 percent increase from one year ago.

Employment was 2 percent lower than year ago levels in September. The regional unemployment rate was 5 percent, up from 4.6% one year ago.

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 0.81 points in the third quarter, after two of the five components of the leading index fell.

There were 993 new business filings with the Office of the Minnesota Secretary of State in Northwest Minnesota in the third quarter of 2016 — representing a 7.2 percent increase from one year ago.

Employment decreased by 1.8 percent over the year ending September 2016. The regional unemployment rate was 3.6 percent in September, which was higher than the 3.4 percent rate observed one year ago.

Southeast
Southeast Minnesota’s economy is expected to see an acceleration over the next several months, according to a variety of economic indicators. The Southeast Minnesota LEI increased by 2.34 points in the third quarter of 2016, led by a rise in the number of residential building permits in Rochester as well as higher new filings of incorporation and LLC in the Southeast Minnesota planning area.

There were 821 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the third quarter — representing a 2.1 percent increase from one year ago.

Employment fell by 0.9 percent over the year ending September 2016. Compared to September 2015, 2,415 fewer residents of Southeast Minnesota now have jobs. The regional unemployment rate was 3 percent in September, marginally higher than the 2.8 percent level recorded in the year earlier period.

Southwest
Southwest Minnesota’s economy is expected to see normal economic growth over the next several months, according to a variety of economic indicators. The Southwest Minnesota LEI was essentially flat in the third quarter of 2016, after rising by 1.27 points in the second quarter. Two of the four LEI components were positive in the third quarter.

There were 544 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the third quarter — representing a 5 percent increase in new filings than one year ago.

Employment decreased by 2.9 percent over the year ending September 2016. 6,157 fewer Southwest Minnesota residents have jobs than did one year ago. The regional unemployment rate was 3.3 percent in September, an increase on its 3 percent reading in September 2015.

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