Northeast Minnesota Economic and Business Conditions Report: First Quarter 2014

Northeast Minnesota business conditions are expected to improve over the next several months according to the predictions of the St. Cloud State University (SCSU) Northeast Minnesota Index of Leading Economic Indicators. The leading economic indicator index (LEI) improved in the first quarter as increases in filings for new business incorporations, improvements in a general measure of state business conditions and lower initial jobless claims drove the index higher. This was partially offset by weaker results of a supply managers’ survey and a decline in the value of first quarter Duluth/Superior Metropolitan Statistical Area (MSA) residential building permits. There were 539 new business filings with the Office of the Minnesota Secretary of State in Northeast Minnesota in the first quarter of 2014 — representing an 8.5 percent improvement from one year ago. There were 54 new regional business incorporations in the first quarter, a 22.9 percent drop from 2013. Over the past 12 months, new limited liability company (LLC) filings in Northeast Minnesota increased by 15.2 percent — rising to 266 in the first quarter of 2014. New assumed names totaled 192 in this year’s first quarter — a 12.9 percent increase from the first quarter of 2013. There were 27 new filings for Northeast Minnesota non-profits in the 2014 first quarter — one more than in the 2013 first quarter. Northeast Minnesota employment grew at a 0.8 percent rate over the first quarter. More than 1,000 additional residents of Northeast Minnesota are now employed compared to one year ago, about equal to the growth of the labor force. The regional unemployment rate in March 2014 was 7.2 percent, slightly lower than the 7.3 percent rate of March 2013. This quarter’s initial claims for unemployment insurance are basically unchanged from the first quarter of 2013, and there are nearly two job vacancies for every five unemployed people in Northeast Minnesota. Data from the Duluth/Superior Metropolitan Statistical Area (MSA) show strong economic conditions in Northeast Minnesota’s largest market. Compared to March 2013, employment is higher, the unemployment rate is lower, the average weekly work week and average hourly earnings are higher, and the value of residential building permits has expanded, all favorable signs for the Duluth/Superior MSA