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The opportunity presented an additional challenge because the company only had a 30-day window to make a final decision. The chamber, along with the Minnesota Department of Employment and Economic Development, the Hibbing Economic Development Authority and the Iron Range Resources, took quick action and combined their resources to successfully put together an incentive package to support the expansion. The expansion will increase DMR's employment to more than 100 employees. DMR is very happy with the local support which ensures their continued growth will stay in Hibbing.
The recession continued to be the dominant point of discussion during our 2000-2010 visits. As we predicted in the 2008-2009 Grow Minnesota! Annual Report, the effects of the recession began to ease this year, but the economy has not roared back. In short, the recession is still affecting businesses. This section will examine the economic trends, brought to our attention by the Grow Minnesota! visits.
Recession Is Still Affecting Minnesota Businesses...
We heard about the effects of the recession. Take, for instance, the data collected from Grow Minnesota! visits on sales in the last two years. As shown in chart 3, only 35 percent of businesses visited indicated their sales in the last two years had increased. Compare that with data collected during the 2006-2007 visits, the height of the economic boom, where 68 percent of companies visited said sales had increased in the last two years. Companies still are hurting from the recession and are not back to prerecession sales levels.
Chart 3:
Profitability of companies tells a similar story. As shown in chart 4, only 27 percent of businesses visited are reporting increased profitability during the last two years. During the height of the economic boom, 56 percent of companies visited indicated profitability had increased in the last two years. Again, that 29-percent drop tells us that the recession continues to have an effect on Minnesota businesses.
Chart 4:
...But Companies Are Doing What's Necessary To Come Out Of It...
Even though the recession is still top-of-mind for Minnesota businesses, that does not mean plans for growth have stopped. Minnesota companies are working harder than ever to produce and introduce new goods and services to new markets. Looking at Chart 5, 61 percent of companies visited indicated they plan to have new products in the next two years. This shows that Minnesota companies are continually innovating, either to try to break into new markets or to gain market share in their existing market. This number is down about 10 percent from the prerecession period, but shows that Minnesota companies are continually looking for ways to grow their businesses.
Chart 5:
Charts 6 and 7 show how companies are trying to penetrate new markets. Access to new markets helps the companies grow and prosper in Minnesota. What is especially surprising is the market our visits indicate is their primary market – the local market. In this year's visits, 46 percent of companies visited indicated that their primary market was the local market and an additional 21 percent indicated their primary market was Minnesota. This means that 87 percent of companies visited depend on Minnesota. Last year, 82 percent indicated Minnesota as their primary market. Chart 7, the fastest growing market, shows more of the diversity in markets that brings new dollars to Minnesota. It's unfortunate, but Minnesota companies visited seem to still be dependent on the state. The dependency on the United States seems to be slowly changing, though. Last year, 8 percent of companies visited reported that their fastest growing market was located internationally, and this year we saw that number increase to 10 percent.
As reported last year, less than 1 percent of businesses in the United States currently export, even though 95 percent of the world's customers and 60 percent of the world's buying power is located outside of the United States. There is great opportunity for growth outside the United States. This year Grow Minnesota! made its first effort to help companies expand their markets outside the United States by leading the Minnesota delegation to the Centrallia 2010 expo. More than 600 companies visited Winnipeg, Manitoba, for three days to network and to look into sales opportunities from around the globe. Minnesota had two participants.
Chart 6:
Chart 7:
...And The Future Looks Promising.
Companies across Minnesota are beginning to report that the economy is slowly turning around. For instance, when asked about plans around building/expanding in the next year, 25 percent of companies indicated their plans to build or expand. This is up from 23 percent last year. See chart 8.
Chart 8:
In addition, as shown in chart 9, when asked if companies would be adding jobs in the next year, 27 percent indicated they would be adding jobs and 93 percent indicated that jobs would grow or remain stable. This is up from 84 percent that indicated jobs would grow or remain stable next year.
Chart 9:
Even though the recession has technically ended, Minnesota companies are still feeling its effects. Through hard work, they are turning around and it seems like the business climate is slowly getting better.