SAINT PAUL — Today, Secretary of State Steve Simon released the 2015 third quarter Minnesota Regional Economic and Business Conditions Reports, which predicts the majority of the state will see a softening of economic growth in the coming months, but notes the trend could easily be reversed.
The reports show a mixed economic outlook for Minnesota in the coming months. While all six planning areas saw a decrease in Leading Economic Indicators (LEI) in the third quarter, five of those planning areas saw an increase or remained neutral in the second quarter. There can be considerable variation in the LEI from one quarter to the next, so the prediction of a softening economy could be reversed as new data are reported.
Across the state there was growth in payrolls and higher earnings per hour in the private sector compared to one year ago. Additionally, five of six planning areas saw employment increase and regional unemployment rates decrease. To view each region’s full report online, click here.
“This year, as I traveled throughout Minnesota on my first 87-county tour as Secretary of State, I heard firsthand from small businesses and entrepreneurs how important these reports are to forecasting and understanding Minnesota’s economic environment,” said Secretary of State Steve Simon. “Small business owners just want to be able to set up and run their businesses with the best economic data, trends, and information available for their areas, and these reports continue to be a vital resource toward achieving that goal.”
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 economic regions. The economic reviews and forecasts are based on a comprehensive examination of several datasets, including business filings.
“Softening in the national economy and some slowdown in residential building permits largely contributed to a mixed economic outlook for the rest of 2015 and early 2016,” said King Banaian, report co-author and dean of the School of Public Affairs at St. Cloud State University. “All six regions’ leading indicator series were down for the third quarter, and five of six were down over year-ago levels. Total new business filings were mixed, with three regions up year-over-year and three regions down. Nonetheless, employment grew in all planning areas except Northeast Minnesota.”
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Twin Cities
Twin Cities business conditions are expected to be steady over the next several months, according to a variety of economic indicators. The Twin Cities Index of Leading Economic Indicators (LEI) fell by 1.6 points in this year’s third quarter, and is now 4 percent below its level of one year ago.
There were 9,684 new business filings with the Office of the Minnesota Secretary of State in the seven-county metro area in the third quarter of 2015 — representing a 5 percent increase from one year ago.
Employment increased by 0.8 percent over the year ending September 2015. The regional unemployment rate was 3.1 percent in September, an improvement on its 3.4 percent reading one year earlier.
Central
Central Minnesota business conditions are expected to see slower economic growth over the next several months, according to a variety of economic indicators. After seeing gains in four of the five components of the LEI in the second quarter, the leading index has now turned down, with three components becoming negative. The Central Minnesota LEI fell by 5.84 points in this year’s third quarter, and is now 5.51 percent below its level of one year ago.
There were 1,181 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the third quarter of 2015 — representing a 3 percent decrease from one year ago.
Employment increased by 1.1 percent over the year ending September 2015. Compared to one year ago, 4,018 more residents of Central Minnesota now have jobs. The regional unemployment rate was 3.2 percent in September, lower than the 3.6 percent rate reported one year ago.
Northeast
Business conditions in Northeast Minnesota are expected to be steady over the next several months, according to a variety of economic indicators. While three of the five components of the LEI decreased in this year’s third quarter, the overall index turned only slightly negative following a strong reading three months ago. The Northeast Minnesota LEI fell by 1.81 points in this year’s third quarter, and is now 15.3 percent below its level of one year ago.
There were 467 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the third quarter of 2015 — representing a 1.1 percent decrease from one year ago.
Employment decreased by 0.3 percent over the year ending September 2015. The regional unemployment rate was 4.6 percent, higher than the 4.3 percent rate reported one year ago.
Northwest
Northwest Minnesota business conditions are expected to soften over the next several months, according to a variety of economic indicators. The Northwest Minnesota LEI fell by 9.37 points in this year’s third quarter, and is now 1.6 percent below its level one year ago.
There were 926 new business filings with the Office of the Minnesota Secretary of State in Northwest Minnesota in the third quarter of 2015 — representing a 3.6 percent increase from one year ago.
Employment increased by 1.8 percent over the year ending September 2015. The regional unemployment rate was 3.4 percent in September, slightly lower than its 3.5 percent level one year ago.
Southeast
Southeast Minnesota business conditions are expected to soften over the next several months, according to a variety of economic indicators. The Southeast Minnesota LEI fell by 11.23 points, and is now 10.2 percent lower than its level one year ago.
There were 804 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the third quarter of 2015 — representing a 5.1 percent improvement from one year ago.
Employment increased by 0.5 percent over the year ending September 2015. Compared to September 2014, 1,378 more residents of Southeast Minnesota now have jobs. The regional unemployment rate was 2.8 percent in September, an improvement from 3.1 percent in the year earlier period.
Southwest
Southwest Minnesota business conditions are expected to soften over the next several months, according to a variety of economic indicators. The Southwest Minnesota LEI fell by 15.24 points, and is now 3.8 percent lower than one year ago. The leading index has shown considerable volatility from one quarter to the next, so the third quarter’s negative reading could easily be reversed in coming quarters.
There were 518 new business filings with the Office of the Minnesota Secretary of State in Southwest Minnesota in the third quarter of 2015 — representing 8.8 percent fewer new filings than one year ago.
Employment increased by 1.4 percent over the year ending September 2015. 3,046 more Southwest Minnesota residents have jobs than did one year ago. The regional unemployment rate was 3.0 percent in September, an improvement on its 3.2 percent reading in September 2014.
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CONTACT: Ryan Furlong, 651-297-8919, ryan.furlong@state.mn.us