Study shows blast of growth in northern Minnesota

Earlier this week, researchers at St. Cloud State University released a study showing increased economic growth across most of Minnesota.

It's a hopeful look at the state's business climate, especially given the sluggish end of 2014 and low commodity prices. Even better, the numbers suggest Minnesota is poised for another six months of growth.

The study itself, a quarterly economic conditions report commissioned by Secretary of State Steve Simon, is 122 pages of graphs and analysis, mined from terabytes of state data.

The report uses new business filings, unemployment rates, and an array of other factors from April through June of this year to track economic changes across six regions of the state, according to King Banaian, dean of the St. Cloud State School of Public Affairs and co-author of the study.

"Most of the state is poised to grow for the rest of the year," he said.

Here are six takeaways from the report:

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Northwest Minnesota rocks. While most of the state saw economic improvements in recent months, Banaian said northwest Minnesota showed the largest growth. More than 600 new businesses popped up from April through June in the region, which includes Moorhead, East Grand Forks and Bemidji.

Cheap gas drives growth. Growth is largely thanks to low gas prices. The whole state benefited from sub-$2.50 a gallon gas this year, but this had more impact in northwest Minnesota, which is especially rural. "People up there have to drive a long way," Banaian said, "so gas prices tend to affect them more."

Duluth's strength tempers Range struggles. Minnesota's Iron Range, in the northeast corner of the state, faced hundreds of mining layoffs this year, raising the region's unemployment rate to 5.6 percent, the highest in the state. Even so, an increase in new residential developments in Duluth and more new business filings buoyed the study's findings.

Commodity prices hurt. Southwest Minnesota is the only part of the state not growing. Job growth and business development is stagnant from Mankato to the South Dakota border, thanks in part to low agricultural commodity prices. Banaian didn't specifically research turkey farms, but said destruction of flocks by the avian flu virus certainly impacted economic growth in the region.

Higher education helps. Colleges are often in close proximity to economic growth. Urban centers with established universities, like Duluth, Moorhead, and the whole Twin Cities metro area often have better business climates than the surrounding rural areas.

Picture's incomplete. There are some dead zones in the study's data. Indian reservations are completely absent from Banaian's research. Reservations are treated as sovereign nations, so their businesses are not required to file paperwork with the state. That means any expansion of casinos on the Mille Lacs, Fond du Lac, Leech Lake, White Earth and Red Lake lands don't impact the study.