Central Minnesota Economic and Business Conditions Report - Third Quarter 2015

Mixed signals of the future economic health of the Central Minnesota planning area have emerged as predictions of the Central Minnesota Index of Leading Economic Indicators (LEI) have weakened in the past quarter. 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. One negative compononet of the LEI is St. Cloud area residential building permits. Also dragging down this quarter’s index is a general measure of state business conditions and weaker new filings of incorporation in Central Minnesota. Improved initial jobless claims and higher national durable goods orders helped lift the index. 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. There were 114 new regional business incorporations in the third quarter, an 8.8 percent decrease from year ago levels. Over the past 12 months, new limited liability company (LLC) filings in Central Minnesota decreased 5.2 percent—falling to 669 in this year’s third quarter. New assumed names totaled 348 over the recent quarter—a rise of 0.9 percent compared to the same period in 2014. There were 50 new filings for Central Minnesota non-profits in the third quarter—nine more filings than one year ago. Central Minnesota employment was 1.1 percent higher in September 2015 than it was one year earlier. 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. Initial claims for unemployment insurance were 6.2 percent lower in September than they were one year earlier. The Central Minnesota labor force continues to grow (rising 0.8 percent over the past year) and job vacancy rates jumped in this year’s second quarter. Nearly 77 vacancies now exist for every 100 people unemployed in the area. Economic performance in the St. Cloud area was mixed, with weaker employment and lower work hours being offset by accelerating wages, lower unemployment rates, fewer jobless claims and more help wanted linage. A recent survey of St. Cloud area business leaders was mostly less optimistic than one year earlier. New business filings weakened in the largest market in the Central Minnesota planning area