Regional Economic Conditions

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:

• The most recent 3-month period saw solid revenue growth among reporting firms;
• There were notable differences in responses based on firms’ size and ownership;
• Workforce growth was notably slow among all firms but less so among larger firms, and that matters;
• Wage growth was moderate overall, but stronger growth at larger firms;
• Firms face significant challenges but (for the moment, at least) not directly COVID-related; and 
• Overall outlook is quite optimistic across all firm sizes, the first time we are seeing net positive numbers across all firm sizes (note: results precede the recent increase in Delta variant cases).

 
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.
B

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:

• About 3.5x the protection compared to the unvaccinated.
• If you get breakthrough case, capacity to spread is still possible.
• If vaccinated, 8x the protection from symptoms.

• If vaccinated, 25x the protection of getting severe disease, placing you in hospital.

Feds recently made announcements re vaccines, a "third dose": for the immuno compromised, organ recipients, and those on chemotherapy
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!