CURRENT BUSINESS CONDITIONS FUTURE BUSINESS CONDITIONS

ST. CLOUD AREA ST. CLOUD AREA

BUSINESS August 2024 vs. Three Months Ago 6 Months from Now vs August 2024
August BUSINESS August
OUTLOOK SURVEY May 2024 2023 OUTLOOK SURVEY May 2024 2023
Summary August 2024 Decrease No Change Increase Diffusion Diffusion Diffusion Summary August 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 29.4 52.9 17.6 -11.8 17.7 6.9 Level of business activity for 33.3 20 46.7 13.4 23.5 13.8
your company your company

Number of employees on Number of employees on

your company's payroll 17.6 52.9 29.4 11.8 -18.7 13.8 your company's payroll 0 93.8 6.3 6.3 12.5 10.7

Length of the workweek for 0 94.1 5.9 5.9 6.3 3.4 Length of the workweek for 0 93.8 6.3 6.3 17 0
your employees your employees

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

machinery, structures, etc.) by 5.9 76.5
Type something 17.6 11.7 31.3 32.1 machinery, structures, etc.) by 6.3 62.5
Type something 31.3 25 35.3 10.7
your company your company

Employee compensation Employee compensation

(wages and benefits) by your 0 52.9 47.1 47.1 31.3 53.6 (wages and benefits) by your 0 50 50 50 43.5 51.7
company company
Prices received for your Prices received for your
companyʼs products 5.9 58.8 35.3 29.4 35.3 27.6 companyʼs products 6.3 37.5 56.3
Type something 50 41.2 41.4

National business activity 33.3 40 26.7 -6.6 12.5 20.8 National business activity 30.8 38.5 30.8 0 31.3 -4.2

Your companyʼs difficulty 0 80

Type something 20 20 6.2 10.7 Your companyʼs difficulty 7.1 85.7
Type something 7.1 0 25 10.7
attracting qualified workers attracting qualified workers

*Source: SCSU Herberger Business School ; Department of Economics *Source: SCSU Herberger Business School ; 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
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.

Business hiring plans on hold for now, but

other indicators show growth through winter
BY KING BANAIAN AND MANA
KOMAI MOLLE Future difficulty finding qualified workers KEY RESULTS
St. Cloud State University (Diffusion index)

The St. Cloud Area Quarterly 70

55
Business Survey improved 50 50

Diffusion Index (% increase - % decrease)

slightly in the months of May 60 45
through July 2024 versus the Shaded areas are local recessions 40 41.2 41.4
previous quarter. While 29% of 50 (including 2024 Q2 = COVID)
35
businesses reported decreasing 40 30
activity for their own firms (vs.
17.6% reporting an increase) 25 25
30 23.5
employment turned more 20
positive. 20
15
13.4 13.8
► Hiring trends turned 10 10 10.7
positive in the quarter, with 5
29% reporting an increase and 0
0 0
17% reporting a decrease. 47% Future Business Activity Future Prices Received Future Difficulty
reported higher compensation -10
Attracting Qualified
costs, higher than experienced -20
Workers
this spring.
1999 Q1
1999 Q4
2000 Q3
2001 Q2
2002 Q1
2002 Q4
2003 Q3
2004 Q2
2005 Q1
2005 Q4
2006 Q3
2007 Q2
2008 Q1
2008 Q4
2009 Q3
2010 Q2
2011 Q1
2011 Q4
2012 Q3
2013 Q2
2014 Q1
2014 Q4
2015 Q3
2016 Q2
2017 Q1
2017 Q4
2018 Q3
2019 Q2
2020 Q1
2020 Q4
2021 Q3
2022 Q2
2023 Q1
2023 Q4
2024 Q3

► The current difficulty in Aug 2024 May 2024 Aug 2023

hiring qualified workers also
increased to its highest level
since the last quarter of 2022. 2023. It seems more likely firms qualified workers; half expect is causing our customers to that, the lowest reading was in
► One respondent noted, are expecting and waiting for compensation to increase and spend more on marketing which spring 2009.
“Small layoffs as local companies lower rates in the near future. 31% none expect it to decrease. helps us.” The St. Cloud Index of
right size, decrease talent of businesses reported plans to ► Expectations for ► As we have stated over Leading Economic Indicators
needed has negatively impacted increase capital expenditures in respondents’ own business the last 15 years, more survey rose despite these survey results,
our business. We are working the next six months (see below.) activity retreated from our May respondents expecting less reaching a reading of 112.1 versus
harder than in years past with ► “Continued higher interest survey, but this is rather normal future difficulty in hiring 109.6 last quarter and 114.0 a
less staff.” rates have a negative impact for this time of year. qualified workers than those year ago. Four indicators were
► The diffusion index for on margin,” said another survey ► A majority of respondents expecting greater difficulty have positive, including the strength
current capital expenditures was respondent. indicate they expect to receive accompanied recessions in the of the St. Cloud Stock Price
the lowest we have registered ► Survey respondents were higher prices for their products local economy. Remarkably, 86% Index. This forecasts a rise in
since 2011. almost unanimous in their over the next six months. At 50, of respondents said there would seasonally adjusted private
While tempting to blame high evaluation of the labor market the diffusion index for this item be no change, with 7% on each sector employment in the St.
interest rates, the prime rate in for the next six months: they is the highest in two years. side of increase and decrease. Cloud MSA of about 1.4% over
2011 was less than half of the expect to hold employees ► Businesses are working This is the lowest reading since the next four to six months.
current level of 8.5% has been, constant; they see little change hard to be able to raise prices. the pandemic quarter in 2020 This is faster growth than we
which has been in place sing July in the difficulty of hiring One commenter said, “Inflation (which only read -2.2); before expected in the previous survey.

We asked:
BY KING BANAIAN
AND MANA KOMAI MOLLE
little to no impact. “Shutdown our
computers for almost one business
Effects of
CrowdStrike outage?
Eighty-nine percent of our
respondents perceived no significant
We asked: Through May 2024,
international trade in agricultural
St. Cloud State University day,” one respondent says. “Thankfully, effect on their business. “We do goods and livestock was down 14%
we chose a different product (McAfee) not derive any revenue locally,” one in Minnesota. What is the impact of a
The CrowdStrike outage of 3 years ago,” another respondent respondent comments. decline in the farm sector on your firm?
July 2024 disrupted public sector comments. Thirty-three percent (6%) of our
functions, and impacted a wide range DECLINE IN THE AG SECTOR respondents are slightly (significantly)
of private industries including but IMPACT OF Minnesota ranks as the top fourth concerned about the negative
not limited to finance, health care, TRUMP/VANCE RALLY export state in agriculture. Exported effect of the decline in Minnesota’s
broadcasting, travel and hospitality, On July 27, 2024, former President products include soybeans, corn, feeds, agricultural sector. Fifty-three percent
and manufacturing across the globe. Donald Trump, together with his vice pork, soybean meal, dairy, wheat, suggested that their business is mainly
This massive disruption of the daily life presidential nominee J.D. Vance, held processed grains, vegetable oil, beef, independent of the agricultural sector.
and its estimated economic damage a political rally at the Herb Brooks poultry, processed vegetables, etc. The remaining 6% of the respondents
of over $10 billion (U.S.) underlines the National Hockey Center at St. Cloud Major trading partners include, China, believed that the decline in the
vulnerability of our interconnected State University, addressing issues Canada, Mexico, Japan, and South agricultural sector could benefit them.
cyber infrastructure and emphasizes such as immigration, border security, Korea. “We do a lot of work with the
the importance of coordination, inflation, and crime. With over 8m000 According to Minnesota Department agricultural sector but have not seen an
monitoring, testing, risk management, supporters attending the rally, our of Agriculture, “the agricultural impact yet,” one respondent says. “This
recovery planning, contingency plans, second special question focuses on industries contribute to over 15% of question is sort of misleading. Generally
and continuity strategies. the economic impact of the event as state’s total economic activity and speaking, my business is not impacted
We asked: What impact, if any, perceived by local businesses. support more than 10% of all jobs” by this decrease in agricultural business.
did the CrowdStrike software update We asked: When compared to (2023 Minnesota agricultural facts and However, in the big picture — relational
outage of July 19 have on your firm? other large community events such as stats). Minnesota agriculture impacts to the state economy — a significant
Twenty-six percent of our Summertime by George or the Benton many other economic sectors such decrease in agricultural business
respondents report a major or moderate County Fair, what impact did the as manufacturing, transportation, real could have a (negative) effect on the
impact on their business activities, while Trump/Vance political rally on July 27 estate, construction, finance, etc. economy,” another business owner
the remaining 74% report experiencing have on your business? replies.

Special Question #1 Special Question #2 Special Question #3

The Impact of the Crowdstrike Software The Impact of Trump/Vance The Impact of a Decline
Outage of July 19 Political Rally in the Farm Sector
100 100 100

90 90 89% 90

80 80 80

70 70 70

60 60 60
56%
53% 50
50 50

40
40 40

30 33%
30 30
20
20 21% 21% 20
10
10 5% 5% 10
5% 0 0% 6% 6%
0 Positive/Less than Local More Positive Impact than Negative Impact No Impact 0
Major Impact Moderate Impact Little Impact No Impact Events Local Events Significant Concern Small Concern No Dependence Helpful
 Private employment
St. Cloud MSA with 2 forecasts, 2023-24
(numbers are January 2025 forecasts)

96,500 96,441
96,000

Every three months, two St. Cloud State 95,500

University economists analyze the latest business
and worker data, as well as the results from a survey 95,000
of local business leaders. The result is the St. Cloud
Area Quarterly Business Report. It has been published 94,500
four times a year since 1999. For the first year,
St. Cloud LIVE is the publishing partner for this 94,000 94,517
content.
93,500

MEET THE AUTHORS: 93,000

92,500

KING BANAIAN 92,000

Center for Policy
91,500
Research and Community
Engagement 91,000
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
Jan-25
320-308-4797

Seasonally adj. private employment, St. Cloud MSA, actual through 7/24

MANA KOMAI MOLLE What we expect without leading indicators, 8/24 - 1/25 What we expect with leading indicators
St. Cloud State University
Department of Economics

Leading indicators positive in

320-308-4781

middle of 2024
King Banaian specializes in analyzing data and
writing about it in the second portion of this report.
Mana Komai Molle collects and analyzes
responses to the St. Cloud Area Business Outlook
Survey, covered in an early portion of the report. Impact of Indicators
Questions about the survey can be directed to BY KING BANAIAN AND use to measure “the on St. Cloud Leading
her. Special questions asked in the survey may at MANA KOMAI MOLLE state of the St. Cloud
times deal with public policy but do not reflect a St. Cloud State University economy,” which is the Economic Indicators
political agenda of either of the authors. level of private-sector July 2024
Four of the six employment.
indicators of the St. Cloud Our “meter man” has Up/Down?
Area Leading Economic been at 4 in the last two
Indicators index (LEI) were quarters, indicating that Initial Claims for
ONLINE positive in the quarter of employment should
Unemployment Insurance
DOWN
May to July 2024. The be growing somewhat
For the full report, future outlook of business above what the economy
log on to owners in the St. Cloud would grow at if we New Business Incorporations UP
www.stcloudlive.com. Quarterly Business Survey were in a neutral market.
contributed positively, As seen in the graph
as did St. Cloud 11 Stock below, LEI forecasts Professional Employment Type something DOWN
Price Index. private employment on
The decline in a seasonally adjusted St. Cloud 11 Stock Price Index UP
professional and business basis to be 96,441.
services employment was (Though see the footnote
a negative this quarter. below.) Looking only at Current Conditions in Survey Type something UP
Three other items — initial the employment data,
claims. new business however, forecasts a
incorporations and current peak December and a Future Conditions in Survey UP
conditions — were small decline to 94,517. July
contributors this quarter. 2024 seasonally adjusted a clear path for growth is a normal swing in
We base LEI on a private employment was through the rest of 2024. employment between
model for data we 93,752 by comparison. A footnote: The July and January of more
St. Cloud Economic Indicators observe regularly over
time known as “classical
The difference between
the forecast without and
state does not provide
seasonally adjusted
than 3,000 jobs. The
largest of these changes
decomposition.” Any with LEI is statistically data for St. Cloud: are because of hiring
time series can be broken significant. we calculate seasonal for the holiday seasons
down or decomposed into Neither forecasts a patterns ourselves. We that occur in the fourth
components that include recession yet, and LEI calculate than on an quarter of a year. We
a trend and a seasonal says a recession would average July there will forecast therefore that
factor, plus some other not happen in the next be 725 more jobs than the number the state
cycle and a residual. LEI six months. Compared a “normal” month and will report next year
tries to improve a naïve to the national forecasts an average January has for St. Cloud private
guess of the cycle based concerning Federal 2,268 fewer jobs than employment would be
on the time series we Reserve rate cuts, we see normal. That is, there 94,174, not 96.441.
Type something

Type something
St. Cloud labor force jumps 1.6%
BY KING BANAIAN AND has helped but as baby Unemployment rates can and June filings have risen
MANA KOMAI MOLLE boomers age over the next rise when there is a sharp as a result.
St. Cloud State University five years that source of increase in labor supply • Residential building
labor will decline. At an as well as slack labor permit valuations were
The St. Cloud area estimated 74%, the area demand, and that appears slightly down versus
labor force grew faster already has a high labor to be the case here. year-ago levels. Central
Type something in the year through July force participation rate. Other indicators were Minnesota Builders
2024, rising 1.6%. A recent Thus, we think the local mixed: Association reports that
report from the Minnesota unemployment rate at • Initial claims for that the number of new
State Demographic 4% is anomalous. A 1.1% unemployment insurance building permits for single-
Center projects the increase in employment rose 18.2% in the quarter family homes in the region
metro area’s population in the area is high relative versus one year ago. In between January and July
of 18- to 64-year-olds to past quarters and 2023 the law changed held constant at 127; St.
to have already peaked. to payroll employment for education support Cloud’s permit count fell
Type something
Increasing participation of (as reported elsewhere professionals to receive from 53 to 46.
workers aged 65 and older on these pages). unemployment insurance

St. Cloud St. Cloud 11 Stock Price Index

(Nov. 1994 = 100)

Stock Price
Index
1600
High
1,417 on 7/31/2024 We have left the
1400
The St. Cloud 11 Stock Price Index LEI business climate
continued to climb higher through Previous high meter at four (out of
the summer, ending July at a (then) 1,167 on 1/4/2022 six), which is the same
1200
all-time high of 1417.32. As noted as the previous (June)
elsewhere in this report, this index’s QBR.
8.8% gain in the quarter is a significant
1000
positive development for the local
economy over the next four to six
months.
800
Between July 31, 2023, and July
31, 2024, the index gained 25.4%
compared to 20.3% for the S&P 500,
600

Recruiting
14.8% for the Dow Jones 30 Industrial
Average, and 22.6% for the tech-heavy

for you.
NASDAQ. All 11 stocks posted gains in
the quarter, led by New Flyer showing a 400
8/26/2021
9/27/2021
10/26/2021
11/24/2021
12/27/2021
1/26/2022
2/25/2022
3/28/2022
4/27/2022
5/26/2022
6/28/2022
7/28/2022
8/26/2022
9/27/2022
10/26/2022
11/28/2022
12/28/2022
1/30/2023
3/1/2023
3/30/2023
5/1/2023
5/31/2023
6/30/2023
8/1/2023
8/30/2023
9/29/2023
10/30/2023
11/29/2023
12/29/2023
1/30/2024
2/29/2024
4/1/2024
4/30/2024
5/30/2024
7/1/2024
7/31/2024

51% gain after posting its first positive

net earnings quarter in three years. C.H.
Robinson gained 25.4% after reporting
a positive earnings surprise in late July.
jobshq.com