CURRENT BUSINESS CONDITIONS FUTURE BUSINESS CONDITIONS

ST. CLOUD AREA ST. CLOUD AREA

BUSINESS Feb/Mar 2024 vs. Three Months Ago 6 Months from Now vs. Feb/Mar 2024
December Feb/March BUSINESS Dec Feb/March
OUTLOOK SURVEY 2023 2023 OUTLOOK SURVEY 2023 2023
Summary Feb/Mar 2024 Decrease No Change Increase Diffusion Diffusion Diffusion Summary Feb/March 2024 Decrease No Change Increase Diffusion Diffusion Diffusion
(%) (%) (%) Index3 Index3 Index3 (%) (%) (%) Index3 Index3 Index3
What is your evaluation of: What is your evaluation of:

Level of business activity for 16 48 36 20 -4.5 3.1 Level of business activity for 16.7 33.3 33.3 33.3 9.5 32.3
your company your company

Number of employees on Number of employees on

your company's payroll 16 44 40 24 -18.2 9.4 your company's payroll 0 66.7 33.3 33.3 0 25.8

Length of the workweek for 8 80 12 4 -9.1 0 Length of the workweek for 4.2 83.3 12.5 8.3 4.5 12.9
your employees your employees

Capital expenditures (equip., Capital expenditures (equip.,

machinery, structures, etc.) by 8 64
Type something 28 20 31.8 19.4 machinery, structures, etc.) by 4.2 50
Type something 45.8 41.6 4.8 40
your company your company

Employee compensation Employee compensation

(wages and benefits) by your 0 56 44 44 31.8 54.8 (wages and benefits) by your 0 33.3 66.7 66.7 0 56.7
company company
Prices received for your Prices received for your
companyʼs products 0 70.8 29.2 29 14.3 32.3 companyʼs products 8.3 54.2 37.5
Type something 29.2 9.5 30

National business activity 23.8 57.1 19 -4.8 -22 -12.9 National business activity 5 65 30 25 20 3.3

Your companyʼs difficulty 12 64

Type something 24 12 0 16.1 Your companyʼs difficulty 0 70.8
Type something 29.2 29.2 9.5 13.3
attracting qualified workers attracting qualified workers

*Source: SCSU HBS College of Business; Department of Economics *Source: SCSU HBS College of Business; Department of Economics
Notes: (1) reported numbers are percentages of businesses surveyed. (2) rows may not sum to 100 because of “not applicable” Notes: (1) reported numbers are percentages of businesses surveyed. (2) rows may not sum to 100 because of “not applicable”
and omitted responses. (3) diffusion indexes represent the percentage of respondents indicating an increase minus the and omitted responses. (3) diffusion indexes represent the percentage of respondents indicating an increase minus the

SURVEY:
percentage indicating a decrease. A positive diffusion index is generally consistent with economic expansion. percentage indicating a decrease. A positive diffusion index is generally consistent with economic expansion.

KEY RESULTS

45

Di usion Index (% increase - % decrease)

40

Local leaders report better results over winter

38.1 38.1
35
33.3 32.3
30 29.2 30 29.2
BY KING BANAIAN AND businesses reported price increase. An has been a good sign for
MANA KOMAI MOLLE expanding their payroll identical number of the area economy. 25

St. Cloud State University over that period versus business leaders reported 20
16% reporting fewer receiving higher prices Businesses were
15
ST. CLOUD — St. workers. 44% reported for their goods in the last divided on whether public 14.3 13.3
Cloud area business they had raised their three months and expect policy should prioritize 10
leaders reported better wages (not unusual for the to be able to raise prices affordable child care or
5
results in the November start of a new calendar through the spring and workforce housing as a
2023 to January 2024 year) and none reported summer of 2024. workforce development 0
period, with 36% reporting declining compensation. ► Business are tool. There was roughly Future Business Activity Future Prices Received Future Di iculty
higher business activity ► There was a drop in skeptical of what is equal support for both as a Attracting Qualified
Workers
and only 16% reporting the share of businesses happening nationally, with priority.
lower business activity. who increased their capital less than 1 in 3 expecting ► Business leaders also
This result reversed what spending in the most increased activity over the found on-the-job training Mar-24 Dec-24 Mar23
was observed last fall, recent quarter. next six months. and coaching/mentoring
when more business ► Almost 30% expect as most beneficial a priority in business industry.
reported lower than higher There has been it to be harder to find to develop their own organizations, slightly More details on these
activity. no decline in the qualified workers in the employees. more than technical skills results appear elsewhere in

We asked:
► Forty percent of expectations of future future, which historically ► Soft skills were or skills specific to one’s this report.

About workforce initiatives,

in public policy and business
BY KING BANAIAN Special Question #2 Special Question #3
AND MANA KOMAI MOLLE
St. Cloud State University Worforce Development Issues Essential Knowledge and Skills (Scores)
ST. CLOUD — Sustained Other 3.5
economic growth and 10.53%
development requires increased
workforce participation and 3.0 3
2.8
enhanced labor productivity.
Thus, strategies and initiatives 2.5
which remove structural barriers 2.3
to workforce participation, 2.0
and improve employee Housing
productivity are essential at 47.37%
1.5
the macroeconomic as well as
organizational level.
At the institutional level 1.0
attention is often focused
on improving employee Childcare
productivity through formal 42.11% 0.5

education, technical skills,

0
enhanced knowledge of the
So Skills Technical/Industry Level Skills Leadership Skills
work place, continued learning,
adaptation to different roles and
circumstances, and leadership of the following practices consider on the job training attitudes do not help prioritize Our rankings are on a four-
abilities; at the macroeconomic are more beneficial to your to be the most beneficial in one over the other. point scale. Respondents rank
level policies can address organization? Please rank.” enhancing employee skills and “Which of the following soft skills as the most essential
notable structural barriers to ► Online courses abilities. “On the job training employee knowledge/skills to the work place, followed by
workforce participation such as ► Classroom training is our primary focus,” one are more essential to your technical and industry level
housing and childcare. ► On the job training respondent said. “We either organization. Please rank.” skills tied for second place.
Our special questions are ► Coaching and mentoring hire consultants to build ► Technical skills “Listening, communicating,
designed to address the issue ► Cross training (providing programs for training or do it ► Industry specific and relationship building are
of workforce initiatives both exposure to different roles in in house,” another respondent knowledge and skills the base of our growth but you
at the public policy level and the workplace) suggested. ► Leadership skills have to pay to play with the
within business firms. ► Leadership development. The second place ► Soft skills (such as technical background,” one
We asked three questions: Business leaders ranked belongs to coaching and communication, collaboration, respondent said. Leadership
“Workforce development these six options, so a score mentoring followed closely relationship building, etc.) skills took the last place.
is referred to activities and of 6 would have meant every by cross training. Leadership
initiatives aimed to enhance owner ranked that activity development is ranked in the

Construction drop-off
employee skills and abilities was their top choice of most fourth place followed closely
within the workplace. Which beneficial. Survey respondents by classroom training. The last

coincides with rise in

place belongs to online courses.
“On the job (training is) better,
Special Question #1 online more available,” one
Workforce Development Activities
(Scores)
employer responded.
“In the last year, area
leaders and nonprofits have led
interest rates
discussions identifying housing BY KING BANAIAN AND and building permits have
affordability and child care as MANA KOMAI MOLLE been relatively stable over
5.0
other workforce development St. Cloud State University the last five years. There has
4.5 issues. Of those two items, been a drop off in the last two
4.3
4.2 which one would be more likely ST. CLOUD — With the years however, coincident
4.0 to help your workforce needs?” results of the special question with the rise in interest rates.
► Affordable/more housing on housing vs. child care That change has been most
3.5 3.5
3.4 ► Affordable/more child care as a workforce solution, we notable in Sartell.
3.0 3 ► Other thought some additional data But these only reflect one
Forty-seven percent of on these issues could shed part of the housing market.
2.5 our respondents believe some light. Between 2019 and 2023, 18
affordable housing will be more The Central Minnesota multifamily buildings (with
2.0
helpful to their employees, Builders Association provides at least four units in each)
1.5 while 42% suggest affordable us with data on single-family with 710 total units have
child care is more likely to building permit data that been added to the stock
1.0 help their workforce. 11% helps us consider the increase of housing. Over that same
suggested another item was in supply of housing in that period, the St. Cloud MSA
0.5
most important to workforce segment of the market. added 1,974 persons. (Both
0 development. It is evident that As we have noted before,
Coaching and Cross Training Leadership Classroom Training Online Courses both items matter to workforce construction employment WE ASKED to next page »
Mentoring development and business
 New St. Cloud Index
of Leading Economic Indicators
(1st quarter 2013 = 100, shaded areas are recessions)

130

125
Every three months, two St. Cloud State
University economists analyze the latest 120
business and worker data, as well as the results

LEI Index Value, Base 100

from a survey of local business leaders. The 115
result is the St. Cloud Area Quarterly Business
Report. It has been published four times a year
110
since 1999. For the first year, St. Cloud LIVE is
the publishing partner for this content.
105

MEET THE AUTHORS: 100

95

KING BANAIAN
90
College of Education
and Learning Design

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320-308-4797

Leading indicators show

MARGINAL DIP
MANA KOMAI MOLLE
St. Cloud State University
Department of Economics
320-308-4781

King Banaian specializes in analyzing data and BY KING BANAIAN AND from the recent increase
writing about it in the second portion of this report. MANA KOMAI MOLLE in the St. Cloud 11 Stock Impact of Indicators
St. Cloud State University Price Index. However, future
Mana Komai Molle collects and analyzes expectations of business
on St. Cloud Leading
responses to the St. Cloud Area Business Outlook ST. CLOUD — The St. leaders — in particular, the Economic Indicators
Survey, covered in an early portion of the report. Cloud Index of Leading recent change to future January 2024
Only Molle has access to the confidential list of Economic Indicators fell by expectations on investing
surveyed businesses. Questions about the survey a very marginal 0.1% over in capital equipment and
can be directed to her. Special questions asked in the most recent quarter an expectation of future
the survey may at times deal with public policy but (data through January difficulty hiring qualified
do not reflect a political agenda of either of the 2024.) Three indicators workers — contributed
authors. were up and three others negatively to the index.
were down. The other elements
— initial claims for
ONLINE unemployment insurance;
new business incorporations;
and professional and Type something
For the full report,
business services
log on to
employment — were
www.stcloudlive.com.
marginal contributors.
The very slight decline
in jobs forecasted over the
Type something
next four to six months is
Positive contributions within the margin of error
were mainly due to the in the statistical analysis we
response from St. Cloud use to calibrate LEI. That is
area business leaders about to say, it is not significantly
their experiences between different from zero.
November and January, and

St. Cloud St. Cloud Stock Price Index makes a new high
unemployment ST. CLOUD — The St. Cloud Stock
Price Index rose 18.1% in the period St. Cloud 11 Stock Price Index

rate drops, but still

between November 1, 2023 and January (Nov. 1994 = 100)
31, 2024, greater than the 14.7% growth

higher than state

of the Dow Jones Industrial Average 1400
High: 1,285
and 14.3% of the S&P 500. The prices 1300 on 2/28/2024
Previous high: 1,167
of 5 of the 11 stocks in the index grew on 1/4/2022
by more than 20%, lead by Capital One, 1200

BY KING BANAIAN AND Unemployment in St. up 35%. The company reported much 1100
MANA KOMAI MOLLE Cloud is still higher than for higher earnings at the end of October.
St. Cloud State University the state, though the latter Encore Capital Group was up 33.8%. Only 1000

rate was unchanged over one stock fell in price during these three 900
ST. CLOUD — The labor the last year. months: New Flyer declined 1.4%.
force of the St. Cloud MSA Other area indicators The rally in the index began in 800

fell by 65 workers between gave mixed results. As October and now has extended for the 700
January 2023 and January noted elsewhere on last five months. Though not included
2024, according to data these pages, the stock in our statistical analysis, the graph 600
12/1/2020
1/4/2021
2/4/2021
3/9/2021

12/6/2022
4/9/2021
5/11/2021
6/11/2021
7/14/2021
8/13/2021
9/15/2021
10/15/2021
11/16/2021
12/17/2021
1/20/2022
2/22/2022
3/24/2022
4/26/2022
5/26/2022
6/29/2022
8/1/2022
8/31/2022
10/3/2022
11/3/2022

1/9/2023
2/9/2023
3/14/2023
4/14/2023
5/16/2023
6/16/2023
7/20/2023
8/21/2023
9/21/2023
10/23/2023
11/22/2023
12/26/2023
1/26/2024
2/28/2024

from Minnesota DEED.
The number of workers
employed grew by 195 in
that same time period,
which thus reduced the
unemployment rate to
3.6% from 3.8%.
A drop in the
unemployment rate is
good news for the area,
but stagnant labor force
growth is a constraint
that causes employers
to look harder and spend
more resources looking for
workers. The results in our
price index for 10 of 11 above shows that the stock price index
publicly traded stocks with extended gains and reached a new
significant presence in St. historical high at the end of February.
Cloud rose to a record high
on Feb. 28. However, initial
claims for unemployment
benefits rose 12.7% in the
quarter ending Jan. 31,
Single family building permits, 2018-23 Multifamily housing and population change
compared with year-ago
Source: Central MN Builders Association St. Cloud MN MSA, 2019-2023
levels. The valuation of Source: U.S. Census
350
residential building permits
in the city of St. Cloud fell 300
1500
almost 22% in that same
period. 250 1000
The claims and stock
price data were two of the 200 108 500

survey, shown elsewhere six components of the St. 122

105 207
42 49
147
150 113 0 1411 902 265 1014 826
in this report, confirm that Cloud Index of Leading 77
91
-2179
51
difficulty finding qualified Economic Indicators, 100 54 94 24
24
28 -500
61
workers continues to be a which is slightly down from
problem for area firms. one year ago. 50 -1000

86 92
92 113 99 97 105 -1500
0

St. Cloud Economic Indicators 2018 2019 2020 2021 2022 2023
-2000
St. Cloud Sartell All other area cities
-2500

» WE ASKED pandemic. 2019 2020 2021 2022 2023

continued Census data show that New multifamily units Change in population

2,905 were added to the

data are from the U.S. population between April to the number of births MSA between those dates,
Census.) This included 1, 2020, and July 1, 2023, exceeding the number of with 2,064 net added in
Type something
a substantial decline in raising total population deaths. international migration
population during 2020 to 202,577. Of that total An additional net 436 and 1,628 out-migration to
at the height of the addition, 2,365 were due persons migrated into the other domestic places.

Type something

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