The Free Press, Mankato, MN

November 22, 2012

Local economy rising overall

By Tim Krohn
Free Press Staff Writer

MANKATO — The overall economy is generally on the upswing in the Mankato region, with more people employed, housing sales and prices up and total unemployment claims falling.

But one area — the higher-salary manufacturing sector — is experiencing a bit of a slowdown.

One indicator is the number of first-time unemployment claims filed by laid-off manufacturing workers. The number of claims, compared to a year earlier, has jumped in recent months — up 22 percent in September and up 45 percent in October in the nine-county area. Statewide unemployment claims in manufacturing have also increased, but not by as much — up 16 percent in October.

Rick Sellner, operations manager at Dotson Company, said they’ve seen a slowdown in work recently as the customers who order their parts are seeing a slowdown in business.

“Earlier there was some fear there wasn’t enough foundry capacity, so our clients ordered a lot. Now they’re seeing fewer orders and sitting on a lot of inventory.”

In an interview last month with MN Valley Business magazine — a Free Press publication — the head of Le Sueur Inc. said the foundry was having a similar experience.

“A lot of our customers have acknowledged they’ve seen softening in their orders. Some will be idling their plants for a week or two late this year or early next year,” said Dick Seidenstricker, COO. “We’re being told to push orders out into the months ahead.”    

Housing sales, prices up

Dick Norland, of Midwest Realty in Mankato, said the housing market is showing some encouragement.

“We’ve had some improvement on prices being more solidified and a slight increase in prices.”

The number of existing homes sold in south-central Minnesota was up 12 percent in October compared to the same month last year. There were 153 homes sold, compared to 137 last year, according to figures from the Realtors Association of Southern Minnesota.

The median sales prices was up 9 percent over last year, standing at $129,900 in October. (The median price means half the homes sold for more than $129,900 and half sold for less.) The average price of all homes sold was $143,800.

Norland said the improvement in sales varies from community to community and even within cities. “Some areas of town have had real nice improvements in sales. When you look at a larger region it’s harder to pin down. There are some pockets that have benefited more than others.”

Norland said rising sales prices are likely due in part to fewer low-cost foreclosure homes on the market. “We’ve seen fewer foreclosures for sale. We’ve worked through some of that foreclosure inventory the past two years so that helps in bringing the average prices up.”

Employment numbers stronger

The unemployment rate remains low in most of the nine-county region — a low of 4.2 percent in Nicollet County to a high of 6.2 percent in Watonwan County. And the number of people with jobs continues to inch upward.

In the Mankato-North Mankato Metropolitan Statistical Area, which is all of Blue Earth and Nicollet counties, unemployment stood at 4.4 percent in October, the same as it was a year earlier.

There are 56,903 people employed in the two counties in October, up 210 from a year earlier.