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While some sectors of the local economy continue to be devastated by the COVID-19 pandemic, many area firms are now beginning to recuperate from this spring's shockwaves. Overall local employment was 3.1 percent lower in July 2020 than it was one year earlier, but this is a clear improvement from what was seen in last quarter's St. Cloud Area Quarterly Business Report (at which time we reported an 11.5 percent year-over-year decline in area employment). In addition, published job losses in the Twin Cities (and across the state) are considerably worse than what is seen locally. For example, Twin Cities employment declined 8.7 percent over the year ending July 2020 (and state employment dropped 8.5 over the same period). These relatively stronger numbers in the St. Cloud labor market are little comfort to those firms in the leisure & hospitality sector, where local employment fell 23.1 percent over the past twelve months. The information and "other services" sectors, along with the local government sub-sector, also experienced double digit percentage employment declines over the year ending July 2020. Combined, these four sectors account for 17.3 percent of overall area employment. Other key local sectors are faring better than three months ago. For example, employment in the education/health sector was one percent higher in July 2020 than it was one year earlier (these numbers do not reflect the closure of the Health Partners Central Minnesota Clinic at the end of August). In addition, retail trade employment grew 9.8 percent over the year ending July 2020. Mining/logging/construction employment was also higher locally. These three growth sectors account for more than 40 percent of local jobs. The St. Cloud Index of Leading Economic Indicators was down 0.1% in the quarter and down 0.9% over the last year. Current business activity at surveyed firms was improved from three months ago (when reported activity was weaker than at any time over the 22 years that the St. Cloud Area Business Outlook Survey has been administered). For example, nearly half of surveyed firms report an increase in business activity over the past three months and more than one-third of firms indicate increased capital expenditures in the current quarter. The future outlook of surveyed firms is weaker than usual for the August survey but, on balance, area firms still expect improved business conditions by the beginning of next year. In special questions, nearly half of surveyed firms expect the local recession to continue into 2021—few firms think the local recession will be over by the end of 2020. In other special questions, area business leaders share any positive long-term impact that COVID-19 has had on their firms. They also weigh in on the extent to which the pandemic is likely to influence election outcomes. Finally, firms describe ways in which they are likely to be impacted by the form taken of K-12 school re-openings.

The St. Cloud area economy remains in recession as the uneven effects of the COVID-19 pandemic continue to plague the local labor market. While some local sectors are experiencing uninterrupted strong growth, the virus' impact on the leisure/hospitality and other services sectors is creating historic existential challenges for some area firms. Overall local employment was 3.4 percent lower in October 2020 than it was one year earlier, but this is a clear improvement from what was seen in the June St. Cloud Area Quarterly Business Report (at which time an 11.5 percent year-over-year decline in area employment was reported). The St. Cloud Index of Leading Economic Indicators rose marginally over the past quarter, but was 3.5% higher over the last year. Current business activity at surveyed firms was weaker than usual as was their future outlook, although, on balance, area firms still expect improved business conditions over the next six months. In special questions, business leaders identify COVID-19 relief as the most important issue for the upcoming legislative session in St. Paul. Tax burden, job creation, and health care reform also rank high on firms' list of legislative concerns. In a separate question, most firms report dedicating less than 5 percent of their spending on capital improvements meant to combat COVID-19.

Continued steady economic growth is expected in the Central Minnesota planning area over the next several months according to predictions of the Central Minnesota Index of Leading Economic Indicators (LEI). The leading index rose by 1.30 points in the most recent period, with three components producing positive readings and one index value that was largely unchanged. A downturn in the Minnesota Business Conditions Index is the only LEI component to have a measurable negative reading in the second quarter. Increased St. Cloud area residential building permits contributed to this quarter's higher LEI as did higher national durable goods orders and lower regional initial jobless claims. There were 1,580 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the second quarter of 2018 — representing a 9.7 percent increase from one year ago. 133 new regional business incorporations were tallied in the second quarter, 10.1 percent fewer than their year ago level. New limited liability company (LLC) filings in Central Minnesota increased 10.9 percent relative to the second quarter of 2017. New assumed names totaled 436 over the recent quarter—an increase of 16 percent compared to the same period in 2017. Current quarter new filings for Central Minnesota non-profit were 1.9 percent higher than one year ago. Sixty-six percent of new business filers in the Central Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year's second quarter. Results of this voluntary survey indicate that 5 percent of new filers come from communities of color. Approximately 8.1 percent of new filings were made by military veterans. About 2.3 percent of new filers come from the disability community and 3.5 percent of new filings were made by the immigrant community. Forty percent of new business filings in Central Minnesota in this year's second quarter were initiated by women. MBS results also show that most new business filers in Central Minnesota have between 0 and $10,000 in annual gross revenues (although 100 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Central Minnesota are construction, retail trade, real estate/rental/leasing and other services. Employment levels at most new firms are between 0 and 5 workers, and 47.2 percent of those starting a new business consider this a part-time activity. Central Minnesota employment was 3.4 percent higher in June 2018 than it was one year earlier and the June regional unemployment rate was 3%--considerably lower than one year ago. Initial claims for unemployment insurance were 13.9 percent lower in June than they were in the same month last year. The Central Minnesota labor force rose by 2.5 percent and average weekly wages were 3.7 percent higher than one year earlier. Regional bankruptcies have begun to rise in Central Minnesota. Economic performance in the St. Cloud area was mostly favorable. The future outlook from a survey of St. Cloud area business leaders conducted quarterly by St. Cloud State University was generally improved from one year earlier. Total new business filings of incorporation, assumed name and LLC were all higher in the St. Cloud area. Employment expanded, the unemployment rate fell, initial jobless claims were lower, the labor force increased, and median home sales prices were higher. However, average hourly earnings and hours worked were lower and the cost of living in St. Cloud inched up.

Economic growth is expected to slow in the Central Minnesota planning area over the next several months according to predictions of the Central Minnesota Index of Leading Economic Indicators (LEI). The leading index fell by 6.62 points in the most recent period, with only one component producing a positive reading. Increased national durable goods orders was the only LEI component to produce a favorable outlook in the fourth quarter. The remaining index components--St. Cloud area residential building permits, the Minnesota Business Conditions Index, new regional filings of incorporation, and initial claims for unemployment insurance all helped drag down the local index. There were 1,401 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the fourth quarter of 2018 — representing a 5.3 percent increase from one year ago. 160 new regional business incorporations were tallied in the fourth quarter, 16.8 percent more than their year ago level. New limited liability company (LLC) filings in Central Minnesota increased 3.3 percent relative to the fourth quarter of 2017. New assumed names totaled 332 over the recent quarter—an increase of 1.8 percent compared to the same period in 2017. Current quarter new filings for Central Minnesota non-profit were 36.8 percent higher than one year ago. Sixty-one percent of new business filers in the Central Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in the fourth quarter. Results of this voluntary survey indicate that 6.5 percent of new filers come from communities of color. Approximately 7.1 percent of new filings were made by military veterans. About 2 percent of new filers come from the disability community and 3.8 percent of new filings were made by the immigrant community. Nearly forty percent of new business filings in Central Minnesota in the fourth quarter were initiated by women. MBS results also show that most new business filers in Central Minnesota have between 0 and $10,000 in annual gross revenues (although 99 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Central Minnesota are construction, retail trade, real estate/rental/leasing, professional/scientific/technical, and other services. Employment levels at most new firms are between 0 and 5 workers, and 43.8 percent of those starting a new business consider this a part-time activity. Central Minnesota employment was 1.4 percent higher in December 2018 than it was one year earlier and the December regional unemployment rate was 3.8%--slightly lower than one year ago. Initial claims for unemployment insurance were 0.6 percent higher in December than they were in the same month last year. The Central Minnesota labor force rose by 1.2 percent and average weekly wages rose by 3.7 percent over the past year. Bankruptcies continue to rise in Central Minnesota. Economic performance in the St. Cloud area was mixed. Most components of a future outlook survey of St. Cloud area business leaders conducted quarterly by St. Cloud State University were weaker than one year earlier. Increases in overall new business filings in the St. Cloud area were flat over the past twelve months. Average hourly earnings and hours worked increased, but the relative cost of living in St. Cloud rose. Employment expanded, the unemployment rate fell, initial jobless claims were lower, the labor force increased, and median home sales prices were higher.

Continued steady economic growth is expected in the Central Minnesota planning area over the next several months according to predictions of the Central Minnesota Index of Leading Economic Indicators (LEI). The leading index rose by 0.72 points in the most recent period, with three components producing positive readings. Increased St. Cloud area residential building permits and higher national durable goods orders had the greatest favorable impact on the leading index in the third quarter. A downturn in the Minnesota Business Conditions Index had the largest negative effect on the LEI. There were 1,432 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the third quarter of 2018 — representing a 3.9 percent increase from one year ago. 160 new regional business incorporations were tallied in the third quarter, 3 percent fewer than their year ago level. New limited liability company (LLC) filings in Central Minnesota increased 3.5 percent relative to the third quarter of 2017. New assumed names totaled 370 over the recent quarter—an increase of 6.3 percent compared to the same period in 2017. Current quarter new filings for Central Minnesota non-profit were 15.8 percent higher than one year ago. Sixty-six percent of new business filers in the Central Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year's third quarter. Results of this voluntary survey indicate that 5.2 percent of new filers come from communities of color. Approximately 6.3 percent of new filings were made by military veterans. About 1.8 percent of new filers come from the disability community and 3.3 percent of new filings were made by the immigrant community. Nearly thirty-nine percent of new business filings in Central Minnesota in this year's third quarter were initiated by women. MBS results also show that most new business filers in Central Minnesota have between 0 and $10,000 in annual gross revenues (although 94 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Central Minnesota are construction, retail trade, real estate/rental/leasing, transportation/ warehousing, professional/scientific/technical, and other services. Employment levels at most new firms are between 0 and 5 workers, and 45.8 percent of those starting a new business consider this a part-time activity. Central Minnesota employment was 1.7 percent higher in September 2018 than it was one year earlier and the September regional unemployment rate was 2.2%--considerably lower than one year ago. Initial claims for unemployment insurance were 8.5 percent lower in September than they were in the same month last year. The Central Minnesota labor force rose by 0.9 percent and the job vacancy rate surged as the region's labor shortage worsened. Bankruptcies continue to rise in Central Minnesota. Economic performance in the St. Cloud area was mixed. Several components of a future outlook survey of St. Cloud area business leaders conducted quarterly by St. Cloud State University were weaker than one year earlier. Overall new business filings in the St. Cloud area were also lower. Average hourly earnings and hours worked declined and the relative cost of living in St. Cloud rose. On the positive side, employment expanded, the unemployment rate fell, initial jobless claims were lower, the labor force increased, and median home sales prices were higher.

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."

The pace of economic growth in the Central Minnesota planning area is expected to slow over the next several months according to predictions of the Central Minnesota Index of Leading Economic Indicators (LEI). The leading index fell by 3.28 points in the most recent period, with two components producing negative readings. A decline in a general measure of statewide business conditions and a recent slowing of St. Cloud area residential building permits contributed to this quarter's decline in the LEI. On the positive side were an uptick in national durable goods orders, lower regional initial jobless claims, and increased new filings for business incorporation. There were 1,378 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the third quarter of 2017 — representing a 15.7 percent increase from one year ago. There were 165 new regional business incorporations in the third quarter, a 41 percent rise from year ago levels. New limited liability company (LLC) filings in Central Minnesota increased 17.8 percent relative to the third quarter of 2016. New assumed names totaled 348 over the recent quarter—an increase of 1.5 percent compared to the same period in 2016. Current quarter new filings for Central Minnesota non-profit were 26.7 percent higher than one year ago. Sixty-seven percent of new business filers in the Central Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year's third quarter. Results of this voluntary survey indicate that 4.9 percent of new filers come from communities of color. Approximately 5.7 percent of new filings were made by military veterans. About 2.5 percent of new filers come from the disability community and 3.2 percent of new filings were made by the immigrant community. Forty-one percent of new business filings in Central Minnesota in this year's third quarter were initiated by women. MBS results also show that most new business filers in Central Minnesota have between 0 and $10,000 in annual gross revenues (although 67 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Central Minnesota are construction, retail trade, and other services. Employment levels at most new firms are between 0 and 5 workers, and 43 percent of those starting a new business consider this a part-time activity. Central Minnesota employment was 2.7 percent higher in September 2017 than it was one year earlier and the September regional unemployment rate was 2.9%--much lower than one year ago. Initial claims for unemployment insurance were 18.9 percent lower in September than they were in the same month last year. The Central Minnesota labor force rose by 1.8 percent over the past year but the rate of job vacancies rose. Regional bankruptcies inched up slightly. Economic performance in the St. Cloud area was strong. The future outlook from a survey of St. Cloud area business leaders conducted quarterly by St. Cloud State University was improved from one year earlier. Three out of five measures of St. Cloud area new business filings rose, employment expanded, the unemployment rate fell, average hours worked and the average weekly wage each increased, initial jobless claims were lower, and median home sales prices were up.

The Central Minnesota planning area is expected to experience continued economic growth over the next several months according to predictions of the Central Minnesota Index of Leading Economic Indicators (LEI). The leading index rose by 3.32 points in the most recent period, with three components producing positive readings. Increased St. Cloud area residential building permits contributed to this quarter's rising LEI. In addition, an uptick in national durable goods orders and lower regional initial jobless claims also helped drive the index higher. There were 1,331 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the fourth quarter of 2017 — representing a 4 percent increase from one year ago. There were 136 new regional business incorporations in the fourth quarter, a 1.5 percent rise from year ago levels. New limited liability company (LLC) filings in Central Minnesota increased 10.1 percent relative to the fourth quarter of 2016. New assumed names totaled 326 over the recent quarter—a decrease of 7.1 percent compared to the same period in 2016. Current quarter new filings for Central Minnesota non-profit were 7.3 percent lower than one year ago. Sixty-three percent of new business filers in the Central Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year's fourth quarter. Results of this voluntary survey indicate that 4.9 percent of new filers come from communities of color. Approximately 7.8 percent of new filings were made by military veterans. About 2.5 percent of new filers come from the disability community and 4.2 percent of new filings were made by the immigrant community. Thirty-eight percent of new business filings in Central Minnesota in this year's fourth quarter were initiated by women. MBS results also show that most new business filers in Central Minnesota have between 0 and $10,000 in annual gross revenues (although 82 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Central Minnesota are construction, retail trade, and other services. Employment levels at most new firms are between 0 and 5 workers, and 46 percent of those starting a new business consider this a part-time activity. Central Minnesota employment was 3.3 percent higher in December 2017 than it was one year earlier and the December regional unemployment rate was 4.0%--much lower than one year ago. Initial claims for unemployment insurance were 9.3 percent lower in December than they were in the same month last year. The Central Minnesota labor force rose by 2.4 percent over the past year but the third quarter average weekly wage was lower than one year ago because of the way this statistic is calculated. Regional bankruptcies continue to decline. Economic performance in the St. Cloud area was solid. The future outlook from a survey of St. Cloud area business leaders conducted quarterly by St. Cloud State University was generally improved from one year earlier. Total new business filings in the St. Cloud area were lower, although new incorporations and LLCs increased. Employment expanded, the unemployment rate fell, average hours worked rose, the average hourly wage increased, and initial jobless claims were lower.

The Central Minnesota planning area is expected to experience steady economic growth over the next several months according to predictions of the Central Minnesota Index of Leading Economic Indicators (LEI). The leading index rose by 0.94 points in the most recent period, with four components producing positive readings. Decreased St. Cloud area residential building permits are the only component to weigh on this quarter's leading index. An uptick in national durable goods orders, lower regional initial jobless claims, an increase in the Minnesota Business Conditions Index, and an improvement in new filings of incorporation all helped drive the index higher. There were 1,699 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the first quarter of 2018 — representing a 7.6 percent increase from one year ago. 196 new regional business incorporations were tallied in the first quarter, 21.7 percent more than year ago levels. New limited liability company (LLC) filings in Central Minnesota increased 9.6 percent relative to the first quarter of 2017. New assumed names totaled 451 over the recent quarter—a decrease of 2.6 percent compared to the same period in 2017. Current quarter new filings for Central Minnesota non-profit were 19.3 percent higher than one year ago. Sixty-seven percent of new business filers in the Central Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year's first quarter. Results of this voluntary survey indicate that 5.4 percent of new filers come from communities of color. Approximately 7.1 percent of new filings were made by military veterans. About 2.1 percent of new filers come from the disability community and 3.2 percent of new filings were made by the immigrant community. Thirty-seven percent of new business filings in Central Minnesota in this year's first quarter were initiated by women. MBS results also show that most new business filers in Central Minnesota have between 0 and $10,000 in annual gross revenues (although 110 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Central Minnesota are construction, retail trade, real estate/rental/leasing and other services. Employment levels at most new firms are between 0 and 5 workers, and 41 percent of those starting a new business consider this a part-time activity. Central Minnesota employment was 4.4 percent higher in March 2018 than it was one year earlier and the March regional unemployment rate was 4.8%--considerably lower than one year ago. Initial claims for unemployment insurance were 16.2 percent lower in March than they were in the same month last year. The Central Minnesota labor force rose by 3.7 percent, but the job vacancy rate surged in Central Minnesota. There are now 100.5 job vacancies for every 100 unemployed workers in the region. Regional bankruptcies were essentially unchanged from one year ago. Economic performance in the St. Cloud area was strong. The future outlook from a survey of St. Cloud area business leaders conducted quarterly by St. Cloud State University was generally improved from one year earlier. Total new business filings in the St. Cloud area were led higher by large increases in new incorporations and LLCs. Employment expanded, the unemployment rate fell, average hours worked rose, initial jobless claims were lower, the labor force increased, and median home sales prices were higher.

The St. Cloud area economic outlook has been clouded by the announced future mass layoff of workers at the St. Cloud Electrolux plant. The planned closing of this manufacturing facility is estimated to cause a job loss of 860 workers by the end of 2019. While respondents to the St. Cloud Area Business Outlook Survey express concern about the economic impact of the upcoming plant closing, the future outlook of surveyed businesses is strong as we enter a time of the year in which the area economy typically enjoys seasonal strength. Revised employment data suggest the area labor market was not as strong as we originally indicated in the second half of 2017. For example, we initially reported year-over-year over­all employment growth of l.6 percent in October 2017. This annualized employment growth was recently revised downward to 0.4 percent over this time period. Among other things, the twelve-month growth in the mining/logging/construction sector was originally reported to be 9.2 percent in October 2017. This number is now reported to be only 0.5 percent over this same time period. With the reminder that local employment data are subject to rather large annual revisions, we note that year-over­year overall employment growth slowed to 0.2 percent for the year ending January 2018. The manufacturing, education/health, wholesale trade, mining/logging/construction and government sectors led local job growth, while the retail trade, professional & business services, and leisure/hospitality sectors' employment contracted. The St. Cloud Index of Leading Economic Indicators rose 0.3 percent over the last quarter. Surveyed firms indicate strong expected future employment, increased future prices received, and considerable expected difficulty attracting qualified workers over the next six months.

Despite heightened uncertainty from recent retail store closings, looming na­tional tariff policies and the future clo­sure of Electrolux, area firms continue to report strong optimism about future business activity. Area firms reported continuing difficulty attracting qualified workers, which appears to be restraining local employment growth. Local employ­ment grew at a tepid 0.4 percent rate over the year ending April 2018 as worker shortages limit firms' growth poten­tial. The manufacturing, education/health, wholesale trade, and transportation/warehousing/utilities sectors led local job growth, while the retail trade, mining/logging/construction, and leisure/hospitality sectors' employ­ment contracted. A new St. Cloud Index of Leading Economic Indicators is unveiled this quarter (see accompanying chart). The index increased 3.2 percent in April, pointing to continuing local economic growth over the next several months. Surveyed firms indicate strong current employment activity and improving na­tional business conditions. Firms also report an increase in prices received. KEY TAKEAWAYS 1) Private sector payroll employment in the St. Cloud area rose by 0.2 percent from one year earlier in the 12 months through April 2018. Service providing industries (which account for 80.2 percent of local payrolls) are estimated to have had no employment change over the past year. This is largely attributed to a year-over-year decline in employment in the retail trade and lei­sure/hospitality sectors of the local economy. Employment in these two sectors contracted by 4.2 percent and 9.5 percent, respectively, over the year ending April 2018. Combined, these two sectors account for nearly 20 percent of local jobs. The unemployment rate in the St. Cloud area in April fell to 3.3 per­cent from 3.7 percent a year ago. This is the lowest April unemployment rate since 2000. The labor force rose by 3 percent in the St. Cloud area over the past year. 2) Employment in the health and educational sector grew by 3.3 per­cent over the year ending April 2018. As has been noted in previous re­ports, this sector now accounts for 20.5 percent of area employment (versus 13.9 percent in April 2000). Annual local job growth in the wholesale trade sector was 3 percent and manufacturing employ­ment is estimated to have increased by 3.8 percent over the last twelve months (we note the irony that Electrolux has been hiring workers in recent weeks in an effort to reach increased production goals). Job growth in the transportation/warehousing/utilities sector was 4.2 percent and government sector employ­ment rose by 1.9 percent over the past year. Sectors experiencing job gains rep­resented nearly 69 percent of area em­ployment over the past year. In addition to the loss of jobs in the retail trade and leisure/hospitality sectors that are referenced above, the mining/logging/con­struction sector (most of this sector is construction locally) shed 1.7 percent of its jobs over the past year. This had recently been one of the fastest growing local sectors, so we will keep an eye on these numbers in the coming months. 3) The new St. Cloud Index of Lead­ing Economic Indicators rose 3.2 percent in April and the St. Cloud 13 Stock Price Index fell 6.2 percent over the three months ending April 30, 2018. Over this same period, the S & P 500 fell 1.9 percent. 4) The future outlook of those area businesses responding to the St. Cloud Area Business Outlook Survey is solid. Fifty-one percent of sur­veyed firms expect an increase in busi­ness activity over the next six months, while only 12 percent expect decreased activity. Forty-one percent of surveyed firms expect to expand payrolls by November and 56 percent anticipate high­er employee compensation. Most read­ings from the future outlook survey are stronger than one year ago, with particularly strong performance of the em­ployment, national business activity, prices received and worker shortage in­dexes. Forty-two percent of surveyed firms expect increased difficulty attract­ing qualified workers by November. 5) Forty-one percent of surveyed firms expect to be either directly or indirectly unfavorably impacted by the imposition of tariffs by the Trump administration. Another 41 per­cent expect "no effect" of the tariffs and only 9 percent of firms thlnk this will fa­vorably impact them. In a second spe­cial question, 70 percent of surveyed firms expect "neither net gain nor loss" from an expansion of the Northstar Cor­ridor Commuter Rail service from Big Lake to St. Cloud. Seventeen percent of firms expect to receive a net gain from the expansion of this service, while sev­en percent would expect a net loss. In this quarter's final special question, we asked area firms to express their con­cerns about the recent wave of store closings to hit the St. Cloud area. Forty-­five percent of firms express a small concern and 36 percent have a medium concern. This is a large concern for 14 percent of surveyed companies.

St. Cloud-area businesses continue to experience steady growth, and the local six-month-ahead economic outlook remains strong. Payroll data indicates overall St. Cloud metropolitan area employment grew at a 1.6 percent annual rate over the year ending October 2017. The construction sector once again led local job growth, followed by strong gains in wholesale trade and the educational and health sector employment. The financial activities, information, government, transportation/warehousing/utilities and re­tail trade sectors all experienced year-over-year job losses. The leading economic indicator series declined slightly over the last quarter. Surveyed firms indicate strong busi­ness activity in the current quarter with higher capital expenditures, a lengthening workweek, improved national business conditions and increased difficulty attracting qualified workers.

The Central Minnesota planning area is expected to experience strong economic growth over the next several months according to predictions of the Central Minnesota Index of Leading Economic Indicators (LEI). The leading index rose by 6.20 points in the most recent period, with four components producing positive readings. Among other things, strength in a general measure of statewide business conditions, an uptick in national durable goods orders, higher St. Cloud metropolitan area residential building permits, and lower regional initial jobless claims helped lift the Central Minnesota planning area LEI higher in the second quarter. There were 1,440 new business filings with the Office of the Minnesota Secretary of State in Central Minnesota in the second quarter of 2017 — representing a 1 percent decrease from one year ago. There were 148 new regional business incorporations in the second quarter, a 9.2 percent reduction from year ago levels. New limited liability company (LLC) filings in Central Minnesota increased 9 percent relative to the second quarter of 2016. New assumed names totaled 376 over the recent quarter—a decrease of 17.9 percent compared to the same period in 2016. Current quarter new filings for Central Minnesota non-profit were 29.3 percent higher than one year ago. Sixty-five percent of new business filers in the Central Minnesota planning area completed the voluntary Minnesota Business Snapshot (MBS) survey in this year's second quarter. Results of this voluntary survey indicate that 4.2 percent of new filers come from communities of color. More than 7 percent of new filings were made by military veterans. About 1 percent of new filers come from the disability community and 3.7 percent of new filings were made by the immigrant community. Thirty-five percent of new business filings in Central Minnesota in this year's second quarter were initiated by women. MBS results also show that most new business filers in Central Minnesota have between 0 and $10,000 in annual gross revenues (although 101 new filers have revenues in excess of $50,000). The most popular industries for new businesses in Central Minnesota are construction, retail trade, and other services. Employment levels at most new firms are between 0 and 5 workers, and 43 percent of those starting a new business consider this a part-time activity. Central Minnesota employment was 1.8 percent higher in June 2017 than it was one year earlier and the June regional unemployment rate was 3.8%--much lower than one year ago. Initial claims for unemployment insurance were 16.6 percent lower in June than they were in the same month last year. The Central Minnesota labor force rose by 1.5 percent over the past year, but average weekly wages flattened out. Regional bankruptcies continue to decline.

After a quarter in which local firms' future outlook weakened considerably, the area economy appears to have rebounded in recent months. Despite some anecdotal evidence of recent regional layoffs, quantitative and qualitative indicators of local economic performance point to improved future conditions in the St. Cloud area. Even though the St. Cloud area labor force was reported to have declined over the past 12 months, area payroll employment (this is obtained from a different source of data than the labor force measure) grew at a 1.8 percent annual rate. Construction, retail trade and educational and health sectors once again led the area in employment growth, while manufacturing, transportation, warehousing and utilities, leisure and hospitality and local government sectors shed jobs. The leading economic indicator series rose by 0.28 percent in the last quarter. Surveyed firms were much more optimistic about future business activity than they were last quarter. Compared to one year ago, the future outlook is only slightly lower (although the future employment outlook weakened again in this quarter's survey.) Area firms expect to see rising wages and prices over the next six months, and planned capital expenditures are at their highest level since February 2006. Special Survey Questions: Priorities for the 2017 legislative session in St. Paul. Most important legislative priority. What is impact of election results?