Grow Minnesota! winter quarterly 2023
Grow Minnesota! introduction
Quarterly economic snapshot – Minnesota’s economic performance through Q4 2022
Minnesota business expansion and investment trends
Grow Minnesota! – Tools and resources for Minnesota businesses
Grow Minnesota! introduction
The Grow Minnesota! team at the Minnesota Chamber of Commerce helps businesses connect to resources to grow and expand in the state. How can we help?
Direct business assistance:
- Grow Minnesota! staff can help your business navigate the multitude of resources and tools available to Minnesota businesses. Our team visits with businesses to learn about their operations, key challenges and growth plans. We then follow up with a customized report to identify available resources and provide further guidance on how to utilize these resources. To get started, fill out our Grow Minnesota! in-take form or contact us directly at firstname.lastname@example.org.
- Check out some of our economic insights in the sections below and look for more articles and special reports in 2022.
- Grow Minnesota! can provide customized economic data and reports upon request. Contact us at email@example.com for more information.
Local economic development support:
- Grow Minnesota! partners receive the tools and support they need to lead business retention and expansion strategies in their local communities. Contact Vicki Stute, Vice President of Programs and Business Services, firstname.lastname@example.org to learn more.
Quarterly economic snapshot – Minnesota’s economic performance through the fourth quarter of 2022
Minnesota’s economy headed into 2023 in a stable but uncertain place. Read more here as we break down Minnesota’s economic performance through the end of 2022.
NOTE: The Minnesota Department of Employment and Economic Development (DEED) released revised jobs numbers on March 9 that are not reflected in this analysis. Stay tuned for the upcoming economic snapshot that will feature an analysis of this new data.
- Hiring demand cooled in late 2022 but the state’s labor market remained stable. Minnesota employment fell in December for the first time since September 2021, ending a 14-month job growth streak. However, Minnesota employers added 18,400 jobs in the fourth quarter and 91,000 jobs over the year, increasing by 3.2%.
- Unemployment rose through the second half of 2022, ticking up to 2.5% in December from an all-time low of 1.8% in July. Despite the recent uptick, however, Minnesota’s unemployment remains very low by historical standards, matching the previous all-time low of 2.5% set in 1999.
- Minnesota’s total available labor force declined by 6,721 people from October to December, after showing some improvement in the first half of the year. The lack of recovery in Minnesota’s labor supply remains a critical challenge for the state’s economy.
- Minnesota expanded GDP output in the third quarter but continues to trail U.S. growth. The state’s real GDP grew by 0.8% an average annual basis from the pre-pandemic peak (Q4 2019) to Q3 2022, ranking 35th among all states, and trailing the U.S. growth rate of 1.6% in that time.
- U.S. inflation continued to cool in the fourth quarter. The consumer price index (CPI) slowed to 6.5% in December from a year earlier, down from a peak of 9.1% in June 2022.
- U.S. economic outlook remains uncertain, as forecasters show mixed possibilities in 2023. This article from the Federal Reserve provides a helpful historical review of how accurate forecasters have been in predicting recessions, and how this perspective can help shape expectations going forward.
Minnesota business expansion and investment trends in 2023
Grow Minnesota! collects insights on business expansion trends through surveys and one-on-one conversations with business leaders around the state. Below is a recap of recent findings, anecdotes, and major expansion announcements this winter.
- A majority of businesses surveyed are still expecting revenue gains in 2023, though fewer expect significant gains and nearly twice as many are expecting moderated decreases in 2023 than in 2022 (see chart below).
- Reasons for cooling revenue growth differed across companies. One commercial construction firm explained that demand and revenue spiked so significantly in 2021 and the first half of 2022 that their more recent cooldown represents a “rebalancing” of demand in their sector, rather than sharp decline in activity. Another company, a midsized consumer goods brand in the Twin Cities, described that a slowdown in consumer spending created weakened sales in the middle of 2022, causing an inventory glut. However, sales picked back up in late 2022 and they expect the near-term outlook to be stable, albeit slightly below target growth.
- Nearly half of businesses we heard from expect to increase their workforce in 2023. Forty-nine (49%) of businesses expect a moderate or significant increase in staffing in the next year and 37% expect headcount to remain stable. Only 9% expect moderate decreases and none expect a large decrease in employment.
- 81% of businesses report difficulty finding workers, and 47% say it is harder to find employees than it was a year ago. Only 6% say that it is easier than a year ago to find workers.
- Despite headwinds in the broader economy, many companies we surveyed and spoke to are still planning new investments and expansions. Two-thirds of businesses reported potential or confirmed plans to expand their operations. These future expansion plans range from smaller scale investments in equipment to large-scale expansions that will lead to significant capital investment and job creation. Nearly two-thirds of the planned investments will take place in Minnesota, while 25% plan to occur in another state.
- Some out-of-state expansions are driven by strategic opportunities to expand in new markets or by the need to add capacity to existing facilities in various locations. For example, Eden Prairie-based food and beverage manufacturer, SunOpta, recently announced expansion plans both in Minnesota and Texas. These expansions show that both strategic location factors – such as proximity to markets and supply chains – as well as support from local and state officials play a role in winning new investments.
- However, recent announcements from Huber, Epitome Energy and Talon Metals have sparked renewed concerns over regulatory barriers that may inhibit business investment in the state. These three projects – which announced plans to move their new expansions to other states after facing lengthy permitting delays in Minnesota – represent a combined loss of 350 potential new jobs and $1.2 billion in capital investment.
Each quarter, the Department of Employment and Economic Development (DEED) rounds up information on publicly announced business expansions. As DEED reports, at least 21 companies announced expansion plans in the fourth quarter of 2022 that will, if completed, invest a combined $221 million in capital expenditures and create an estimated 778 new jobs. Below are some recent examples of new projects, innovations, and initiatives that will shape the economic landscape in our communities in the months and years to come.
Cambria, known for its luxury countertops, expands again.
STAR TRIBUNE: Cambria's $130 million quartz-countertop factory expansion roared to life this month — and with it, the family-owned company now has 1 million square feet of operations an hour south of Minneapolis in Le Sueur.
The plant addition, the third in 15 years, offers a sixth production line and 50 new jobs. Already, Cambria has added 130 jobs this year and now employs 1,900 workers nationwide.
Former NBAer Devean George plans modular housing manufacturing facility in Minneapolis
BUSINESS JOURNAL: A group led by former NBA player Devean George wants to turn a Minneapolis warehouse into a manufacturing facility for modular housing.
George’s firm, Minneapolis-based North Group LLC, plans to lease a 200,000-square-foot building at 415 Royalston Ave. N. for the production facility that could open by 2025. The city’s Business and Zoning Committee voted Monday to issue a $2 million loan to the project, which will now head to the City Council for review. A total of 315 people would work at the facility, located immediately northwest of downtown Minneapolis, when it fully opens.
SunOpta breaks ground on warehouse near its plants in Alexandria
BUSINESS JOURNAL:Minnesota food and beverage manufacturer SunOpta just broke ground on a new warehouse in Alexandria as part of its five-year goal to double its plant-based business by 2025.
Located within a few miles of two SunOpta facilities, the 252,000-square-foot warehouse will allow the company to expand its overall handling and storage capacity, with the ability to accommodate roughly 20,000 pallet positions, as well as consolidate three other warehouse spaces into one. It will be used to store raw materials for plant-based products, including oats, soybeans, hemp and tea, plus finished goods.
Winnebago Industries to Establish Dedicated Research and Development Facility
GLOBAL NEWSWIRE: Winnebago Industries, Inc. (NYSE: WGO), a leading outdoor lifestyle product manufacturer, today announced the development of a new facility and expanded resources dedicated to innovating next-generation technologies for the recreational vehicle and marine industries. The Winnebago Industries Advanced Technology Innovation Center will focus on incubating and prototyping new technology applications across a wide range of technical and product-feature categories, including alternative energy management and autonomy. The facility will be well-equipped with leading-edge technology and sized to meet the needs of the Company’s outdoor product portfolio.
Development of the Advanced Technology Innovation Center, which will be located in the Twin Cities, will begin in early 2023.
Murphy Logistics signs industrial lease in Shakopee, needs another 200K s.f. of industrial space
BUSINESS JOURNAL:Murphy Logistics recently expanded its footprint in a Shakopee distribution building and is now on the hunt for even more industrial space in the Twin Cities.
The Minneapolis-based third-party logistics company took on about 175,000 square feet in the building at 901 Canterbury Road, bringing its total contiguous footprint at the site to around 1 million square feet. The building is a former distribution center for Kmart.
Murphy was "bursting at the seams" in the building and searching for additional space elsewhere, until one of the former tenants offered the company its space in the Shakopee building. Murphy assumed that tenant's lease and moved into its new space on Feb. 13.
Grow Minnesota! – Tools and resources for Minnesota businesses
Below is a round-up of articles and reports to understand economic trends and access key resources to grow and expand in Minnesota.
Looking for ways to grow your business? We can help.
Contact Grow Minnesota! staff at email@example.com today to get answers to your questions and/or to schedule your Grow Minnesota! visit.
Interested in sponsoring a 2023 quarterly or annual report?
Contact the Chamber's Elizabeth Sherry to learn about exclusive sponsorship opportunities for the Grow Minnesota! 2023 quarterly and annual reports, or other Grow Minnesota! digital publications. Get your brand in front of businesses from around the state.