Indicators point to economic slowdown
Southeast Minnesota business conditions are expected to slow over the next several months, according to the Southeast Minnesota Index of Leading Economic Indicators.
A drop in business filings, building permits and consumer confidence hurt the index, which is now 7.5 percent lower than a year ago, according to the Southeast Minnesota Economic and Business Conditions Report for the first quarter issued this week.
But a reduction in Southeast Minnesota initial jobless claims was the one favorable indicator that contributed positively to this quarter's index.
But the report says economic fundamentals remain strong in Southeast Minnesota, and the index generally has trended upwards in the last three years despite quarterly volatility.
The quarterly report is a collaboration between the Office of the Minnesota Secretary of State and the School of Public Affairs Research Institute of St. Cloud State University.
"Decisions to consume medical services depend in part on consumer choice, so consumer sentiment is used as a national-level indicator of southeastern Minnesota business activity," the report says. "Sentiment weakened in the most recent quarter.
Interestingly, the educational and health sector saw employment increase only 0.2 percent, well below its usual rate, and below the 0.9 percent increase in overall employment in Rochester.
Other statistics from the Index report:
• There were 887 new business filings with the Office of the Minnesota Secretary of State in Southeast Minnesota in the first quarter of 2015 — representing a 4.7 percent improvement from one year ago. These have remained roughly the same in recent years.
• There were 72 new regional business incorporations in the first quarter, a 14.3 percent rise over year ago levels. Generally, new business incorporations have fallen in from 2005 to 2012, but they appear to have leveled off since. There were more than 700 in the first quarter of 2005.
• First quarter new limited liability company filings in Southeast Minnesota increased by 14.2 percent — rising to 540 in the most recent period.
• New assumed names totaled 245 in this year's first quarter — a reduction of 10.3 percent from the same quarter in 2014.
• There were 30 new filings for Southeast Minnesota non-profits in the first three months of 2015 —eight fewer filings than one year ago.