Minnesota’s economy has remained stable and resilient – a positive sign in today’s uncertain times, according to 2019 data collected by the Minnesota Chamber’s Grow Minnesota! Partnership.
The report also shows that job growth has slowed as businesses continue to struggle to find and retain workers. As of October, Minnesota’s job growth fell to 41st among all states, increasing at an annual rate of only 0.4 percent.
“It’s good news that demand and business confidence have remained steady,” said Sean O’Neil, business development coordinator for Grow Minnesota! “That’s a tribute to Minnesota’s entrepreneurial spirit, given fears of a possible slowdown in our economy and the uncertainty in international trade relations.”
Businesses remain fairly optimistic about their outlook for 2020. Sixty-three percent of those visited in the second and third quarters of 2019 project increased revenue growth in the coming year compared with 57 percent that reported revenue growth during the past year. On a similar note, 41 percent said they plan to add workers in the next year compared to the 32 percent that added workers this year.
The Grow Minnesota! Partnership is the private-sector business retention and assistance program with 90-plus local chambers and economic development organizations throughout the state. Partners conducted confidential one-on-one conversations with nearly 900 business owners and managers in 2019. Collected data includes on-the-ground business conditions, how businesses can stay and grow in Minnesota, and how companies can solve business concerns.
“These data come from with real business decision-makers,” O’Neil said. “These conversations yield meaningful insights to help business leaders, policymakers and other stakeholders understand the complex factors shaping our state’s current and future economic performance.”
Of particular attention, O’Neil noted that the state’s total exports declined for the first time in 10 consecutive quarters. That’s likely a result of business concerns with tariffs and trade uncertainty, along with slower global growth. The decline is significant as Grow Minnesota! data show Minnesota firms that export outperform those that do not export.
“It’s welcome news that the new United States-Mexico-Canada Agreement appears on a path to be ratified,” O’Neil said. “This agreement will create confidence in the markets and create new opportunities for workers across a range of industries.”
Additional key findings from the report:
Innovation remains a bright spot with new technologies and products enhancing businesses’ competitiveness.
Industries tied to construction, professional services and regional/national consumer markets reported the strongest growth. This aligns with the state’s employment data that show construction employment grew at 3.2 percent during the past year, trailing only leisure and hospitality as the second-fastest growing sector.
Industries tied to agriculture, senior care/senior living and legacy products (e.g. forestry products, publishing, telecommunications) struggled in the face of low prices, wage pressures, changes in market demand and various policy impacts.
The manufacturing sector held steady despite fears of a sectoral downturn. While some firms reported weaker overall demand and negative impacts from tariffs, others continued to see steady or even rapid growth as they implemented new technologies and brought new products to market.
While some health care providers – particularly senior care facilities – are facing challenges, hospitals and clinics are investing heavily in new facilities, renovations and expanded services. Many investments taking place in Greater Minnesota boost local construction, engineering and related services.
Businesses reported navigating multiple layers of rising costs – from shipping and supplies to wages and health insurance to state-imposed business costs and federal tariffs.