2017 Economic Outlook A View from Grow MN! s Window

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1 2017 Economic Outlook A View from Grow MN! s Window Faribault

2 What is Grow Minnesota!? Business Retention Business Assistance Statewide: 76 local chamber partners 14 years old

3 Grow MN! Results business retention visits 234 businesses assisted 1,027 jobs protected

4 The Minnesota Match MN s Major Purchasers MN Suppliers Economic Growth

5 Grow MN! Database: Making Matches 6,479 businesses 2,740 Manufacturing 706 Professional Services 303 Wholesalers/Distributors

6 Grow MN! Southeast MN in business retention visits in SE MN 18 Faribault visits 35 Southeast MN businesses assisted

7 Grow MN! s Leading Indicators Innovation: New products? New services? Exports: To U.S.? To the world? Investment: Equipment? Expansion? New facilities? Workforce: Right skills? Right supply?

8 2017 Outlook Key Findings: 2015: Better start than finish 2016: Slow but stable growth 2017: Continued slow growth; but uncertainties remain

9 MN s national rank for most patents per capita Source:

10 Innovation drives growth Percentage of businesses with new products last year

11 Innovators outperform those that don t Percentage of Minnesota Businesses with Increased Sales

12 total export value, in 2015 Source:

13 Room to grow for MN exports Percentage of Minnesota Businesses that Export

14 Exports struggle but possible improvements ahead DEED Quarterly Export Statistics, 2016 Exports declined 4% in 2016 compared to 2015 But, we outperformed some surrounding states (SD down 13; IA down 6%) Increases to Korea, Singapore, UK, and Taiwan Declines to Canada, Mexico, Europe Exports stabilized in Q4, indicating possible improvements for 2017

15 of MN businesses are planning new capital investments Source: update-pictures-view-from-the-west-side-june /

16 Slowdown in new capital investments? Percentage of businesses planning new investments

17 Will MN match the national forecast? Source: FTI Consulting, 2016

18 MN s national rank in labor force participation Source: MANUFACTURING-JOBS-facebook.jpg

19 Slow but steady job growth

20 Trouble filling jobs continues

21 Finding workers: What s working in SE MN? Challenges Senior staff retiring in next 5 yrs Poaching other firms Low number of candidates Especially so for physically demanding jobs Recruiting families to move to rural area Strategies Partner with local schools (Riverland, Winona Tech, etc) Internships Promote from within Staffing agencies Referrals by existing employees Raise wages Refugee employment program Automation/robotics

22 Source: minnesota-state-capitol-governors.html

23 Most Tracked State Policies 2016 statewide visit results, (N = 304)

24 2017 Session Policy Priorities Meaningful Tax Relief Business Property Tax Estate Tax Federal Conformity Section 179 Individual Income Tax Credit for Pass Thru Entities Transportation Investment 10 year plan Roads, bridges, transit Broaden funding base Increase efficiency Wage & Benefit Mandates Minneapolis Lawsuit Explicit state preemption re local ordinances Repeal indexing re min wage Highlight best practices Health Care Self-insurance for small employers Stop costly new mandates/taxes Ensure no $ shifts from the individual market

25 2017: Private Sector Initiative Workforce is our focus! Goal: A persistent & productive link between educators/trainers & local businesses Not just higher education.high school too. Pilots underway in Winona & Brainerd Strategies for underutilized workers, coming Spring 2017

26 2017 Outlook: Southeast MN Economy Fueling Growth SE businesses out-innovating rest of state Companies adding jobs, though slowly SE businesses creatively addressing workforce challenges Slowing Growth Exports down overall 66% still report difficulty hiring Potential decline in new investments Cost of doing business

27 QUESTIONS & COMMENTS

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