SAINT PAUL — The majority of Minnesota is expected to experience strong 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 fourth quarter Minnesota Regional Economic and Business Conditions Reports show five of six planning areas—metro, central, northeast, northwest, southeast—experiencing strong and steady growth in the coming months. Only the southwest planning area is expected to see somewhat slower economic growth.
Across the state’s six planning areas, there was an increase in average weekly wages as tight labor market conditions collided with a declining labor force. The unemployment rate increased in five of six planning areas. Business filings also increased in five of the six planning areas statewide. To view each region’s full report online, click here.
“This year alone I’ve already met with business leaders from Faribault to Elk River to Cloquet while traveling the state—and at every stop I hear how valuable these economic reports can be for small business owners, entrepreneurs, and consumers,” said Secretary Simon. “These reports are a great resource to understanding the economic direction of each region in Minnesota and I encourage all small businesses, local governments and economic development authorities to use this resource.”
The reports were developed by the St. Cloud State University School of Public Affairs Research Institute, as part of their ongoing 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.
“Labor force figures have declined in the fourth quarter, and labor shortages are appearing in many parts of the state causing higher wages,” said King Banaian, report co-author and dean of the School of Public Affairs at St. Cloud State University. “Rural Minnesota has been challenged with lower agricultural exports in 2016, but this could reverse this year.”
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Twin Cities
The Twin Cities economy is expected to see strong economic growth over the next several months, according to a variety of economic indicators. The Twin Cities Index of Leading Economic Indicators (LEI) rose 8.86 points in the fourth quarter after a weak reading in the previous quarter. Four of the five index components increased in the fourth quarter.
There were 9,315 new business filings with the Office of the Minnesota Secretary of State in the seven-county metro area in the fourth quarter of 2016 — representing a 3.3 percent increase from one year ago.
Employment decreased by 1.5 percent over the year ending December 2016. The regional unemployment rate was 3.4 percent in December, an increase from its reading one year earlier (3 percent).
Central
Central Minnesota’s economy is expected to experience steady economic growth over the next several months, according to a variety of economic indicators. The Central Minnesota LEI rose by 0.86 points in the fourth quarter. Three components produced positive readings in the fourth quarter.
There were 1,280 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the fourth quarter of 2016 — representing a 3.7 percent decrease from one year ago.
Employment decreased by 1.6 percent over the year ending December 2016. Compared to one year ago, 5,889 fewer residents of Central Minnesota now have jobs. The regional unemployment rate was 4.8 percent in December, which is up from 4.3 percent one year earlier.
Northeast
Economic conditions in Northeast Minnesota are expected to accelerate over the next several months, according to a variety of economic indicators. The Northeast Minnesota LEI surged by 8.23 points in the fourth quarter, with three of the five components experiencing an increase.
There were 496 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the fourth quarter of 2016 — representing a 1.8 percent increase from one year ago.
Employment was 2.7 percent lower than year ago levels in December. The regional unemployment rate was 6.3 percent, which was unchanged from one year ago.
Northwest
Northwest Minnesota’s economy is expected to experience strong growth over the next several months, according to a variety of economic indicators. The Northwest Minnesota LEI surged by 7.84 points in the fourth quarter, after four of the five components of the leading index increased.
There were 958 new business filings with the Office of the Minnesota Secretary of State in Northwest Minnesota in the fourth quarter of 2016 — representing a 3.8 percent increase from one year ago.
Employment decreased by 2.3 percent over the year ending December 2016. The regional unemployment rate was 5.8 percent in December, which was higher than the 5.3 percent rate observed one year ago.
Southeast
Southeast Minnesota’s economy is expected to see continued strong growth over the next several months, according to a variety of economic indicators. The Southeast Minnesota LEI, which increased by 2.34 points in the third quarter, increased by another 4.04 points in the fourth quarter of 2016. Three components of the LEI had positive readings in the fourth quarter.
There were 798 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the fourth quarter — representing a 7.8 percent increase from one year ago.
Employment fell by 1.9 percent over the year ending December 2016. Compared to December 2015, 5,183 fewer residents of Southeast Minnesota now have jobs. The regional unemployment rate was 3.6 percent in December, higher than the 3.1 percent level recorded in the year earlier period.
Southwest
Southwest Minnesota’s economy is expected to see somewhat slower economic growth over the next several months, according to a variety of economic indicators. The Southwest Minnesota LEI fell by 2.77 points in the fourth quarter (after rising just 0.03 points in the third quarter). Two of the four LEI components were positive in the fourth quarter.
There were 607 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the fourth quarter — representing a 10.4 percent increase in new filings than one year ago.
Employment decreased by 3.2 percent over the year ending December 2016. 6,958 fewer Southwest Minnesota residents have jobs than did one year ago. The regional unemployment rate was 4.2 percent in December, an increase on its 3.9 percent reading in December 2015.