Greetings all. Last Thursday, I had the opportunity to sit in on the Federal Reserve’s latest report on Regional Economic Conditions in the Ninth District. The survey was conducted in late July and reflects a snapshot rather than a scientifically sampled survey.
The quick takeaways:
Ron Wirtz, the Fed’s Regional Outreach Director, spent a lot of time breaking out this idea that, regarding workforce and wages, “not all firms are created equal.” Large firms have an outsized impact on activity. Firms of 10 employees or fewer represent about 75% of all firms; their share of employment is 10%. Large firms are a tiny share of all firms, but they represent over 40% of all employees. The large firms are experiencing strong growth, so overall numbers reflect that. The smallest companies, certain sectors, and the minority- and women-owned firms are net positive but still lagging. The top 3 challenges companies are facing? Supply chain disruptions, labor availability, and price increases.
What are national surveys telling us? Gallup’s latest Economic Confidence Index: reflects a dip in U.S. economic confidence as more say the economy is worsening. Alignable’s August Rent Poll Report: overall, 5% improvement in the number of small businesses that were able to pay their rent this month. This is the first time in 6 months where there was such a positive lift. That said, still 30% could not pay their rent on time or in full, and that number is 45% for restaurants (up from 40% in July).
Regarding downtown Saint Paul, the Downtown Alliance has scheduled a virtual event this Thursday at noon bring together a whole host of public and private sector partners about what to expect in downtown as workers and visitors continue to return.
See you in the trenches.
The number of Minnesotans hospitalized with COVID-19 has more than doubled in August, which includes transfers in from other states, contributing to a tightening supply of available beds across the state – the greatest shortage, however, is highly trained staff.
Last week’s update from MDH re how the Delta variant is impacting those who are vaccinated:
For the rest of us, a "booster" at about 8 mths after the 2-shot series.
COVID-19 vaccines: The Biden administration is reportedly expected to soon approve COVID-19 vaccination booster shots at six months after people receive their original doses rather than eight months, the timeframe it had previously announced. Regulators also are reportedly expected to approve boosters for the Pfizer Inc.-BioNTech SE, Moderna Inc. and Johnson & Johnson shots by mid-September.
On July 22, 2021, the U.S. Secretary of Commerce Gina M. Raimondo announced the implementation of a series of programs to equitably invest $3B that the EDA received under the American Rescue Plan. View a complete list of EDA American Rescue Plan webinar recordings and additional resources on EDA’s American Rescue Plan Program Resources page.
Great summary (introduction?) to Minnesota’s fiscal disparities program. Though contested by some, the program supports fiscal equity in its distribution of fiscal resources among local taxing jurisdictions in the metro area.
Federal: The Supreme Court blocked the Biden administration’s order extending the federal eviction moratorium to a large swath of the country, in a decision expected by both legal scholars and the White House. The ban on evictions, a two-month order, was issued by the Centers for Disease Control and Prevention. The pause covers parts of the United States that are experiencing what the CDC calls "substantial" and "high" spread of the coronavirus. The court's majority said the CDC exceeded its authority with the temporary ban.
Regional: Ramsey County is considering a 1.5% property tax levy increase in 2022 (after 0% increase in 2021).
Local: Saint Paul approves a $209.6M TIF district around Allianz Field, hoping to spur development. The move could make $209M available for developers looking to build housing and infrastructure in the area.
Read more updates in our weekly Chamber Advocacy Update.
State Fair update: people are showing up! Here’s your guide to new foods for 2021 (and which 15 foods belong in the Minnesota State Fair’s hall of fame?). Saturday saw over 129K visitors, though attendance so far is down compared to previous years. And around 150 vendors have pulled out - though labor shortages and supply chain issues have also been cited as factors. When you go, prepare to wear masks when you are indoors (not required, but individual buildings and vendors are able to put their own mask policies in place). I’ll be there on Tuesday to listen to the Doobie Brothers… missed them last year!
And, in case you’re playing, here are the 2021 Minnesota State Fair Treasure Hunt Clues.
What’s ahead for your Chamber?
Sep 8 is our Membership Meeting on Economic Development
Sep 15 is the next event of our Equity Leadership Series: Leading Leaders – Success Stories from Peer Employers.
Find these and more on our Events Calendar!
5 Ways to be a Change Leader: find out what that means, and learn about some effective habits you can implement as well – one at a time.
The Aspen Institute is holding a virtual event Wednesday at 1 p.m. titled "Shaping the Future of Work: A Conversation About Quality Jobs." Panelists from Jobs With Justice, the Families and Workers Fund and the Joint Center for Political and Economic Studies will discuss the need to invest in high-quality jobs and how the pandemic-induced financial crisis focused too much on overall job loss and not enough on raising the level of work, exacerbating economic inequality in the process.
Why it's worth watching: Morning Consult has just released its August numbers for their Inequality Index. The main takeaway from the data was that a decline in “financial vulnerability inequality” offset marginal upticks in the index's other three components - inequality in consumer confidence, lost income and expectations of income loss. One especially relevant thing to note as it relates to the Aspen Institute event and the quality of jobs: Consumer sentiment among adults earning less than $50,000 annually declined 5.2 percent in August compared with July, while a drop of 3.7 percent among those making more than $100,000 per year occurred during the same time period. That key difference underscores how uncertainty over the Delta variant could be growing the gap between lower- and upper-income Americans.
In a recent Robert Half survey, a whopping 63% of 100 recently surveyed Minneapolis senior company managers said their firms will require employees to work in the office full time after pandemic restrictions are completely lifted. Bump this up against a similar survey in April, that found 34% of employees would look for a new job if required to return to the office full time.
Energy Park Corporate Center, home to Kemps, sells for $9.3M. Kemps has downsized and is staying in place, consolidating its former Minneapolis HQ and a smaller sales office into this space.
And Saint Paul’s Full Stack initiative got some great coverage in the Pioneer Press this past weekend. Relaunching with optimism!
So, what did we learn from our survey last week? We asked you about your timing for return to office. Responses remain fairly mixed. As I talk with business leaders, the one sense I’m getting is that larger companies are delaying, smaller companies are coming back sooner (or already back in the office). Across all company sizes, hybrid approach to “return to office” is the generally agreed-upon approach moving forward.
Of the respondents, we had an equal mix from companies across all sizes. Unfortunately, we were not able to assign responses to company sizes.
44% of respondents are back in office already (or are “essential” and never left)
7% are targeting September
20% are targeting October
26% are undetermined at this time
And are you tracking – or even requiring - vaccinations for your employees? A running list of Minnesota employers requiring COVID-19 vaccines for employees. And, yes, you could face legal consequences for lying about your vaccination status.
See you in the trenches.
As the COVID Delta variant spreads, masks now recommended in all but 3 Minnesota counties. And, yes, the entire metro’s counties now recommend masks.
As of Thursday, August 18:
Monetary policy: Federal Reserve Chairman Jerome Powell will speak at the Kansas City Fed’s annual symposium on Aug 27. Why it's worth watching: Chair Powell will deliver remarks at the conference. The theme this year is "Macroeconomic Policy in an Uneven Economy," a timely topic given the uneven economic recovery from the country's coronavirus lockdown.
Minneapolis Fed President Neel Kashkari on the labor market: continues to be tight but there are signs it’s starting to stabilize. And what’s next?
Minnesota saw solid job growth in July, adding 14,500 jobs. State’s seasonally adjusted unemployment rate now dropped to 3.9% (5.4% nationally). And U.S. jobless claims hit new pandemic low.
Consumer spending numbers are due out Friday. Why it's worth watching: Consumer spending grew 1% last month, but the delta variant could change how often people are comfortable returning to pre-pandemic habits. For the next several months, economists will be watching consumer spending figures, along with other indicators, to see if the economy continues to improve or if it starts to falter.
Events and meeting industry is facing new headwinds with the Delta variant – though both the industry and the airlines are still ahead of where they were 5 months ago.
What is manufacturing telling us this month? Orders are up 17% year-over-year; in June, 17 of the 18 manufacturing industries reported growth. The Purchasing Managers Index (PMI) for July was 58.4. Strong, certainly a positive indicator of growth, but not quite “humming along,” constrained by supply chain disruptions and labor shortages.
Prime Therapeutics just pushed their return to office until January 2, 2022.
Planning for the Hillcrest golf course redevelopment project calls for 1000 units of housing and 1000 jobs. This week the Saint Paul Port Authority announced the site is aiming to be carbon neutral as well. The vision is for the Hillcrest site to be the nation's first made-from-scratch, carbon-neutral, mixed-use development. Many renewable energy solutions are expected to be deployed, including rooftop solar arrays, a geothermal heating and cooling network, energy-efficiency and electric vehicle charging stations, planners at the St. Paul Port Authority,
Federal: House Democratic leaders are set to move forward with a vote on President Joe Biden's $3.5 trillion budget despite pushback from moderates to consider a rule that would allow the chamber to simultaneously consider both the budget resolution, which includes the party's social spending proposals, and the bipartisan, Senate-passed infrastructure package. The plan - a move to mollify moderates calling for passage of the physical infrastructure spending first - would be to vote this week on the budget resolution to kick-start social spending negotiations and come back to the roads and bridges later.
Read more updates in our weekly Chamber Advocacy Update.
State Fair adds five more new food vendors to 2021 lineup, despite losing 150-200 vendors. We are seeing some pull backs in terms of participation and volunteers from state offices like the DNR. And WCCO Radio will not be broadcasting live. I’ll most definitely be there, and some of my friends are equally as enthusiastic about NOT attending. Sigh… deep breath.
Watch this video to hear what Ben Fowke has to say as he retires from Xcel, and get ready to welcome veteran Bob Frenzel, as their new CEO!
Join GreaterMSP for the ConnextMSP virtual launch event Tuesday, September 14 12:00 - 1:00 pm. ConnextMSP brings together employers, college and career readiness programs, and higher education partners to support young adults as they navigate their early career journey and reach their full potential. Next month’s launch of ConnextMSP is the result of more than five years of research and in collaboration with many regional partners. Greater MSP and other economic development organizations like the St Paul Area Chamber are committed to helping employers attract and retain talent from our region and beyond.
How are employers thinking about where people will work in the future? Read more from this exclusive survey.
How to serve the “unbanked” and “underbanked”? It turns out these are very different groups, with diverging needs and priorities. And the banking industry is focused on how better to serve both.
This region’s bank giants encouraged – and now welcomes – First Independence Bank, a Black-owned bank from Detroit, into this market.
This ranking lists “Minneapolis” as #2 best Midwest city for startups. I consider this a celebration for the entire region, since examples given are from across the metro.
City of Saint Paul is issuing permits at a strong pace. $31.4M worth of commercial-industrial permits in July alone. This number is down from this time last year, but year-to-date is 13% ahead of last year.
Planning for the Hillcrest golf course redevelopment project calls for 1000 units of housing and 1000 jobs. Last week the Saint Paul Port Authority announced the site is aiming to be carbon neutral as well. The vision is for the Hillcrest site to be the nation's first made-from-scratch, carbon-neutral, mixed-use development.