ECONOMIC TRENDS IMPACTING THE 15-COUNTY REGION
Transcript of ECONOMIC TRENDS IMPACTING THE 15-COUNTY REGION
ECONOMIC TRENDS IMPACTING THE 15-COUNTY REGION
Haakan Thorsgard
Bureau of Business and Economic Research Labovitz School of Business and Economics, UMD
• Unemployment Rate
• Employment, Wages, Establishments
• Self-Employment
• PPP Loans
OBJECTIVES
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
UNEMPLOYMENT RATE15-County Region
Source: MNDEED & WI DWD, 2021
13.5%
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
5.2%
2.7%
5.8%
2.9%
4.8%
11.8%
4.4%
5.5%
2018 2019 2020
UNEMPLOYMENT RATE15-County Region
Source: MNDEED & WI DWD, 2021
13.5%
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
2.9%
6.2%
20.5%
2.9%
6.4%
11.4%
5.8%
4.4%
2018 2019 2020Wisconsin Counties Minnesota Counties
EMPLOYMENT & WAGES2019-Q2 to 2020-Q2
Source: MNDEED & WI DWD, 2021
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
Industry 2020 Average Wages
2020 Employment
2019-2020 % Change
Leisure & Hospitality $17,903 16,808 -74%
Other Services $28,895 4,636 -49%
Information $47,233 1,592 -21%
Construction $46,843 10,159 -20%
Natural Resource & Mining $38,731 4,318 -14%
Trade, Transportation, Utilities $34,008 33,300 -11%
Professional & Business Services $42,499 9,966 -11%
Education & Health Services $45,136 54,756 -10%
Financial Activities $45,240 6,681 -10%
Manufacturing $45,649 13,321 -9%
Public Administration $39,453 16,385 -4%
COVID-19 EFFECTS ON WAGESPercentage Change in Wages 2019-Q2 to 2020-Q2
Source: MNDEED & WI DWD, 2021
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
-5.3%
-5.1%
0.6%
1.7%
6.5%
7.2%
7.5%
8.2%
9.6%
12.1%
14.9%
Natural Resources & Mining
Construction
Manufacturing
Professional & Business Services
Leisure & Hospitality
Trade, Transportation, & Utilities
Education & Health Services
Public Administration
Financial Activities
Information
Other Services
EMPLOYMENT & ESTABLISHMENTS
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
Source: MNDEED & WI DWD, 2021
13,029 13,09913,345
13,678 13,802 13,825
199,098
183,284
2015 2016 2017 2018 2019 2020Establishments Employment
SELF-EMPLOYMENT BY INDUSTRY
Source: EMSI, 2021© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
187197201212223233
268303329339
390392
443562
974
Animal ProductionPainting and Wall Covering Contractors
General Freight Trucking, Long-DistanceCrop Production
Independent Artists, Writers, and PerformersManagement Consulting Services
Automotive Mechanical and Electrical…All Other Specialty Trade Contractors
LoggingSite Preparation Contractors
Janitorial ServicesLandscaping Services
Hair, Nail, and Skin Care ServicesChild Day Care Services
Residential Building Construction
Number of Businesses
PPP LOANS• Nearly 10,000 PPP loans were distributed in the 15-
county region as of March 2021.
• Overall, PPP funding totaled nearly $900 million.
• 88% of loans granted were valued at less than $150,000.
• Combined, PPP loans supported more than 128,000 jobs in the 15-county region.
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
Source: SBA, 2021
Summary• Unemployment rate spiked to 11.8% due to the COVID-19 • Has fallen to 4.4%
• Decreased employment in all 11 industries; all but two saw increased average annual wages
• Employment declined, but the number of establishments increased slightly
• Nearly 10,000 PPP loans were distributed at nearly $900 million• Assisted over 128,000 local businesses
© 2021 REIF • National Bank of Commerce • University of Minnesota DuluthSource: SBA, 2021
CONSUMER CONFIDENCE INDICATORS
Grant GardingUniversity of Wisconsin-Superior
STUDENT TEAM &DATA COLLECTION TIME
© 2021 REIF • National Bank of Commerce • University of Wisconsin-Superior
Spring 2021: 10 UW-Superior Student Researchers
Majors: Business Administration, Economics, Finance, Information Technology, International Business, Mathematics, Transportation & Logistics Management
Data Collection Time: January-March 2021
CONSUMER CONFIDENCE INDICATORS
Index of Consumer Sentiments (ICS)Consumer outlook on personal finances, business conditions and consumption spending
Index of Current Conditions (ICC)Gauges current state of the economy
Index of Consumer Expectations (ICE)Projects future economic and financial conditions
© 2021 REIF • National Bank of Commerce • University of Wisconsin-Superior
CONSUMER CONFIDENCE INDICATORS
© 2021 REIF • National Bank of Commerce • University of Wisconsin-Superior
95
97
99
101
103
105
107
F13
S14
F14
S15
F15
S16
F16
S17
F17
S18
F18
S19
F19
S20
F20
S21
Inde
x Va
lue
ICSentiments ICurrentConditions ICExpectations
SAMPLE SIZE: 169
Source: UWS Consumer Confidence Survey
101.93
101.56
101.02
Time Period
Indices
Spring 2020 to Spring 2021 (percentage
change)
Fall 2020 to Spring 2021 (percentage
change)
Index of Consumer Sentiments (ICS) -1.37 2.25
Index of Current Conditions (ICC) -3.52 3.95
Index of Consumer Expectations (ICE) 0.14 1.14
REIF REGION CONSUMER SENTIMATE CHANGE
© 2021 REIF • National Bank of Commerce • University of Wisconsin-Superior
Source: UWS Consumer Confidence Survey
51%
32%
17%
44%
30% 26%
0%
20%
40%
60%
80%
Uncomfortable Comfortable Indifferent
PERCENTAGE of RESPONDENTS
Fall 2020 Spring 2021
REIF REGION: CURRENT COMFORT LEVEL VISITING RESTAURANTS, BARS,
RETAIL STORES
© 2021 REIF • National Bank of Commerce • University of Wisconsin-Superior
Source: UWS Consumer Confidence Survey
48%40%
8% 4%
44% 42%
12%2%
0%10%20%30%40%50%60%70%
Below Pre-Pandemic Level
Near Pre-Pandemic Level
Above Pre-Pandemic Level
Not Sure
PERCENTAGE of RESPONDENTS
Fall 2020 Spring 2021
REIF REGION: CURRENT HOUSEHOLD SPENDING COMPARED TO PRE-PANDEMIC
LEVEL
© 2021 REIF • National Bank of Commerce • University of Wisconsin-Superior
Source: UWS Consumer Confidence Survey
57%
18%14% 11%
0%
10%
20%
30%
40%
50%
60%
Yes Vaccinated Not Sure No
PERCENTAGE of RESPONDENTS
REIF REGION: PLAN FOR COVID-19 VACCINATION
Source: UWS Consumer Confidence Survey
© 2021 REIF • National Bank of Commerce • University of Wisconsin-Superior
SUMMARY OF CONSUMER SURVEY
© 2021 REIF • National Bank of Commerce • University of Wisconsin-Superior
Consumer Confidence Indicators• Robust improvement regarding outlook of the current
state of the regional economy
• Positive sentiment and optimistic expectations about future economic conditions
REIF Region Comfort Level and Spending • Increased indifference about in-person commerce• Continued household spending recovery to pre-
pandemic levels
COVID-19 Vaccination • Households are mostly in favor of getting vaccinated
REGIONAL EQUITYINDEX
Pontus TavemarkUniversity of Wisconsin-Superior
• Unemployment Rate
• Employment, Wages, Establishments
• Self-Employment
• PPP Loans
OBJECTIVES
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
UNEMPLOYMENT RATE
Source: MNDEED & WI DWD, 2021
13.5%
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
5.2%
2.7%
5.8%
2.9%
4.8%
11.8%
4.4%
5.5%
2018 2019 2020
UNEMPLOYMENT RATE
Source: MNDEED & WI DWD, 2021
13.5%
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
2.9%
6.2%
20.5%
2.9%
6.4%
11.4%
5.8%
4.4%
2018 2019 2020Wisconsin Minnesota
EMPLOYMENT & WAGES2019 to 2020
Source: MNDEED & WI DWD, 2021
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
Industry 2020 Annual Average Wages
2020 Employment
2019-2020 % Change
Leisure & Hospitality $17,903 16,808 -74%
Other Services $28,895 4,636 -49%
Information $47,233 1,592 -21%
Construction $46,843 10,159 -20%
Natural Resource & Mining $38,731 4,318 -14%
Trade, Transportation, Utilities $34,008 33,300 -11%
Professional & Business Services $42,499 9,966 -11%
Education & Health Services $45,136 54,756 -10%
Financial Activities $45,240 6,681 -10%
Manufacturing $45,649 13,321 -9%
Public Administration $39,453 16,385 -4%
COVID-19 EFFECTS ON WAGESPercentage Change in Wages 2019-2020
Source: MNDEED & WI DWD, 2021
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
-5.3%
-5.1%
0.6%
1.7%
6.5%
7.2%
7.5%
8.2%
9.6%
12.1%
14.9%
Natural Resources & Mining
Construction
Manufacturing
Professional & Business Services
Leisure & Hospitality
Trade, Transportation, & Utilities
Education & Health Services
Public Administration
Financial Activities
Information
Other Services
EMPLOYMENT & ESTABLISHMENTS
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
Source: MNDEED & WI DWD, 2021
13,029 13,09913,345
13,678 13,802 13,825
199,098
183,284
2015 2016 2017 2018 2019 2020Establishments Employment
SELF-EMPLOYMENT BY INDUSTRY
Source: EMSI, 2021© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
187197201212223233
268303329339
390392
443562
974
Animal ProductionPainting and Wall Covering Contractors
General Freight Trucking, Long-DistanceCrop Production
Independent Artists, Writers, and PerformersManagement Consulting Services
Automotive Mechanical and Electrical…All Other Specialty Trade Contractors
LoggingSite Preparation Contractors
Janitorial ServicesLandscaping Services
Hair, Nail, and Skin Care ServicesChild Day Care Services
Residential Building Construction
Number of Businesses
PPP LOANS• Nearly 10,000 PPP loans were distributed in the 15-
county region as of March 2021.
• Overall, PPP funding totaled nearly $900 million.
• 88% of loans granted were valued at less than $150,000.
• Combined, PPP loans supported more than 128,000 jobs in the 15-county region.
© 2021 REIF • National Bank of Commerce • University of Minnesota Duluth
Source: SBA, 2021
Summary• Unemployment rate spiked to 11.8% due to the COVID-19 • Has fallen to 4.4%
• Decreased employment in all 11 industries; all but two saw increased average annual wages
• Employment declined, but the number of establishments increased slightly
• Nearly 10,000 PPP loans were distributed at nearly $900 million• Assisted over 128,000 local businesses
© 2021 REIF • National Bank of Commerce • University of Minnesota DuluthSource: SBA, 2021
Isabel Becker and Nicholas AndersonAccounting, Finance and Economics Department
The College of St. Scholastica
BUSINESS CONFIDENCEINDICATORS
OVERVIEWBusiness Sectors Represented
Trade, Transportation and Utilities 31 Leisure and Hospitality 19Professional and Business Services 14Education and Health Services 11Other Sectors 32
Number of Employees1 to 19 6320 to 99 25100 or more 19
N=107
© 2021 REIF • National Bank of Commerce The College of St. Scholastica
GENERAL BUSINESS CONDITIONS
N=105
Source: CSS 2021 Business Confidence Survey
Previous Six Months
N=104
39
26
40
Worsened
No change
Improved
What is your evaluation of the level of your business's activity?
39
34
31
Worsened
NoChange
Improved
How has your business environment changed?
© 2021 REIF • National Bank of Commerce • The College of St. Scholastica
GENERAL BUSINESS CONDITIONSNext Six Months
Source: CSS 2021 Business Confidence Survey
N=107
5
29
73
Will Worsen
Will Remainthe Same
Will Improve
What is your outlook for your business's activity?
9
47
51
Will Worsen
Will Remain the Same
Will Improve
How will your business environment change?
© 2021 REIF • National Bank of Commerce • The College of St. Scholastica
SPECIFIC CONFIDENCE INDICATORS Previous Six Months
Source: CSS Spring 2021 Business Confidence Survey N=107
24%27%
7%
46%
8%
53% 53%
62%
21%
67%
23% 20%
31% 33%
25%
Average hoursworked
Number ofemployees
Selling prices Profits Taxes
By Percentage of Respondents
Decreased No Change Increased
© 2021 REIF • National Bank of Commerce • The College of St. Scholastica
SPECIFIC CONFIDENCE INDICATORS Next Six Months
Source: CSS Spring 2021 Business Confidence Survey N=107
3% 2% 1%
56%48%
61%
41%
58%
41%47%
37%
49%41%
Average hoursworked
Number ofemployees
Selling prices Profits Taxes
By Percentage of Respondents
Predicted Decrease Predicted No Change Predicted Increase
10%
© 2021 REIF • National Bank of Commerce • The College of St. Scholastica
5%
FACTORS LIMITING INCREASED BUSINESS ACTIVITY
Source: CSS 2021 Business Confidence Survey
503636
2019
1716
1513
1199
COVIDShortage of Qualified Labor
Cost of MaterialsGovernment Policy
Lack of DemandShortage of Materials
Competition in Own SectorCost of Labor
OtherHousing
Weather ConditionsCost of Land & Buildings
n = 107; up to 3 per respondent
© 2021 REIF • National Bank of Commerce • The College of St. Scholastica
By number of respondents
HOW WELL ARE WE SUPPORTING ENTREPRENEURSHIP IN OUR REGION?
Source: CSS Spring 2021 Business Confidence Survey
11% 13%7%
15%
34%
52% 55% 58%
49% 51%
37%31%
35% 36%
15%
Business FinancingAvailability
Business IncubationServices and Mentoring
Continuing Education forEntrepreneurs
Awareness and Supportfor Entrepreneur Culture
Cultural Infrastucture, ie.Housing, Arts, etc.
By Percentage of Respondents
Does Not Adequately Support Neutral Adequately Supports
N=107© 2021 REIF • National Bank of Commerce • The College of St. Scholastica
• Last Six Months – Activity and Environment‾ Mixed signals: relatively equal increases and decreases‾ Decreases in profits‾ Increases in taxes paid and selling prices‾ Relatively neutral on hours worked and number of employees
• Next Six Months – Outlook ‾ Significant increase in optimism in comparison to last 6 months
• COVID once again was the primary limiting factor
• Adequate support for entrepreneurs in most areas, but concern regarding adequate cultural, arts and housing availability
SUMMARY OF FINDINGS
Limiting Factors and Hiring
Business Confidence Survey
© 2021 REIF • National Bank of Commerce • The College of St. Scholastica
Business Conditions
National Bank of Commerce
nbcbanking.com
The College of St. ScholasticaRick Revoir, Ed.D.
Dean, Stender School of Business and Technology
Erica Henkel, CPA, MAccAssistant Professor of Finance
and Economics [email protected]
University of Minnesota Duluth Monica Haynes
Director of the Bureau of Businessand Economic [email protected]
RESOURCES
© 2021 REIF • National Bank of Commerce
University of Wisconsin Superior
Rubana Mahjabeen, Ph.D.Associate Professor of Economics
Sakib Mahmud, Ph.D.Associate Professor in Sustainable
Management and [email protected]
David Koslowsky, Ph.D.Assistant Professor of Finance
Tuesday, October 26, 2021
Harbor Side Ballroom, DECC
SAVE THE DATE FOR THE NEXT REIF
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Look for an email to provide feedback on today’s eventor go online at
http://bit.ly/2021SpringREIF