St. Cloud Area Quarterly Business Report Vol. 21 No. 1

The St. Cloud area economy continued to create employment over the year ending January 2019 and surveyed firms express little concern that the area economy will enter recession this year. With year over year job growth of 1.4 percent, St. Cloud was the state’s second best performing metropolitan area in creating jobs over the past year, lagging only Rochester. The construction, manufacturing, educational/health, and wholesale trade sectors of the local economy led the way in employment gains, while the retail trade, professional & business services, and leisure/hospitality sectors shed jobs. The future outlook of surveyed firms is solid, and the St. Cloud Index of Leading Economic Indicators (though down from a high earlier in 2018) points to continued growth over the next several months. Despite ongoing concerns about U.S. trade policy, signals from the bond market that raise the fear of potential national recession, and the looming future closure of Electrolux, the local economy appears to be poised to grow through the summer of 2019. Area firms do appear to be more concerned about the possibility of local recession in 2020. One-third of surveyed firms believe the probability of local recession in 2020 is 50 percent or higher. By comparison, only 13 percent of firms think there is a 50 percent or higher chance of local recession this year. For the second consecutive quarter, nearly half of surveyed firms expect increased prices received over the next six months. In a special question, few firms report being unfavorably impacted by the 35-day federal government shutdown that lasted throughout most of January 2019. Fifty-seven percent of firms indicate the shutdown had “no impact” on their company, while 32 percent reported a “small unfavorable impact.