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Regional Economic Indicators Forum (R.E.I.F.)


To view the full R.E.I.F report presented at the inagural forum on March 25, please click here
 

National Bank of Commerce, in cooperation with the College of St. Scholastica, University of Minnesota-Duluth and University of Wisconsin-Superior, has initiated a long-term study of our area’s economic indicators. The research will be ongoing and focusing on trends for a territory that covers 15 counties in Minnesota and Wisconsin. Participating sponsors of the study are NE MN Small Business Development Center (SBDC) and UW-Superior Small Business Development Center, the Development Association of Superior-Douglas County, APEX, BusinessNorth and the Development Association.
 
The Goals of the project are to:

  • Support business owners in their business decisions by gathering key local economic indicators and trend information
  • Develop specific economic indicators for this region that are not readily available to decision makers
  • Develop tools to assess our progress in economic growth. Prepare baseline measures that will allow comparison with other regions and measure future progress of the region
  • Track the region’s participation in the “new economy” and development in the high tech arena
  • Bring professionals together with business owners for discussion about the local economy and related critical issues in a collaborative, non-political environment
  • Create a business recruitment and retention tool by publishing the information

 

Executive Summary - March 25, 2014

The REIF Region is a 15-county area that covers Northeast Minnesota and Northwest Wisconsin. The 8 counties of Minnesota include the Arrowhead Region — Aitkin, Carlton, Cook, Itasca, Koochiching, Lake, and St. Louis counties — along with Pine County.
 
Economic and Demographic Trends
The regional population trend has been flat. In 2007, the area population was 483,742, and it increased slightly to 483,843 by 2012.

The region is recovering from the Great Recession where total employment had dropped to 191,907 in 2009. However, the 2013 total employment of 196,390 is still below the peak total employed of 200,631 in 2007.

The top three sectors — Health Care and Social Assistance, Leisure and Hospitality, and Retail Trade — account for 48% of the REIF economic employment. But the recovery has not been even across industry sectors. The best growth or recovery has been in Educational Services, Mining, Leisure and Hospitality, and Health Care and Social Services. Ten sectors have not recovered their lost employment.

The dropping unemployment rate 1990 to 2013 indicates a positive sign for the area. The number of unemployed persons is declining, but employment is up only slightly and the number of worker in the labor force is also down.

The 2007 to 2011 communing patterns analysis shows that virtually all of the counties had an increase in the number of workers who live in in one county but commute to another for employment. However, at the same time, more workers are computing into a county to find employment.

Migration data from 2012 shows that between 10.2% and 16.2% moved that year in the different counties. Most movers stayed in their respective counties or their state.
Both Minnesota and Wisconsin had 2010-2013 employment projects that showed strong growth in Health Care and related sectors.

Since 2003, the Health Care and Social Assistance workforce has grown dramatically. However, the average age of this workforce has also increased.
 
Consumer Confidence Indicators
According to the national and regional consumer confidence indicators, the current pace of economic expansion is sluggish. However, consumer sentiment and expectations remain fairly robust despite the unusually cold winter and high home heating costs.     
 
Equity Performance
This is the first report of an ongoing research project that tracks the equity performance of twelve companies located within the 15 county region surrounding the Twin Ports. An index of local stocks of interest is created, measures of future performance are examined, and comparisons to industry averages and market indices are analyzed.

The first report covers the performance of the index and individual stocks that make up the index over a five-year period from January 2, 2009 through December 31, 2013. The report also provides a look into the future by examining measures that provide forecasts of future performance.

Although the index showed a strong positive return of 13.17% over the past year, the overall performance of the index is below average when compared to the benchmark return of 35.44%. Contributing to the lackluster performance were the large negative returns from four of the stocks in the index, which had a strong influence on the overall performance of the index.

The Value Line® Measures analyzed indicate that the stocks in the index are consistent with market expectations of future performance. The overall performance of the index is very consistent and comparable to the market. Additional measures of future performance indicate investors are generally positive about short-term expectations of performance and overall, it appears investors’ expectations of future performance for the index is quite good.  
 
 
Business Confidence Survey—Executive Summary 
After receiving data collected from the initial business confidence survey, we have concluded that overall business confidence is moderately optimistic. The index we created registered a score of 112 (a reading of 100 indicates complete neutrality). Of the 185 responses to the survey, 55% were considered small businesses (1-19 employees). While the overall trends across the board were strong, the top five major factors limiting increases in business activity were shown to be: 1) Competition within sector; 2) Lack of Demand; 3) Shortage of skilled labor; 4) Cost of labor; 5: Cost of materials.
 
Most of our responses came from businesses in the following sectors: Professional Services; Financial Services; Non-Profit; and Leisure and Hospitality. Our initial analysis indicates that there is a cross-industry consensus that business conditions were strong in the previous six months and, although only slightly weaker, will continue to be strong in the coming six months.
 
On the whole, businesses seemed absolutely unaffected by the Affordable Care Act one way or the other.

The second survey is still out and once enough of them have been completed, we will be able to conduct a more complete analysis and measure how much confidence in the regional business landscape has changed since the initial survey.


The R.E.I.F. is governed by a steering/advisory committee comprised of representative(s) from:
  • National Bank of Commerce
  • College of St. Scholastica
  • SBDC – MN
  • SBDC – WI
  • UMD
  • UWS


Meet the Regional Economics Faculty Research Staff.

Resources such as APEX and the Development Association of Superior-Douglas County will be utilized as needed.

 

To view the full R.E.I.F report presented at the inagural forum on March 25, please click here.


The second forum event will take place:

Date: October 28, 2014
Time: 7:00 am - 9:00 am
Location: TBC