BREAKFAST October 27, 2015..."A skills gap is a state of the labor market characterized by a...

BREAKFASTOctober 27, 2015

• P R E S E N T E D B Y •

• W I T H T H E H E L P O F •

ECONOMIC TRENDS IMPACTING THE 15-COUNTY REGION

Travis Eisenbacher

Bureau of Business and Economic Research Labovitz School of Business and Economics, UMD

UNEMPLOYMENT RATE

© 2015 REIF • National Bank of Commerce • University of Minnesota Duluth

Source: LAUS, 2015

8.8%

6.7%

3.7%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

REIF U-Rate States' U-Rate

UNEMPLOYMENT RATE


Source: LAUS, 2015

Mining Layoffs Begin

8.8%

6.7%

3.7%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

REIF U-Rate States' U-Rate

LABOR FORCE


Source: LAUS, graph adapted from DEED’s 2015 Regional Profile

252,996

243,567

5,600

5,650

5,700

5,750

5,800

5,850

5,900

5,950

6,000

6,050

6,100

238,000

240,000

242,000

244,000

246,000

248,000

250,000

252,000

254,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Min

neso

ta a

nd W

isco

nsin

Lab

or F

orce

Thou

sand

s

REI

F La

bor F

orce

Minnesota - Wisconsin Labor Force REIF Labor Force

LABOR FORCE


Source: LAUS, graph adapted from DEED’s 2015 Regional Profile

252,996

243,567

5,600

5,650

5,700

5,750

5,800

5,850

5,900

5,950

6,000

6,050

6,100

238,000

240,000

242,000

244,000

246,000

248,000

250,000

252,000

254,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Min

neso

ta a

nd W

isco

nsin

Lab

or F

orce

Thou

sand

s

REI

F La

bor F

orce

Minnesota - Wisconsin Labor Force REIF Labor Force

In Northeast Minnesota, the number of applicants per job vacancy has plunged

from 10.4 in 2009 to 1.4 today.

UNEMPLOYMENT RATE BY DEMOGRAPHIC


Source: American Community Survey Estimates 2009‐20133.3%

4.7%5.6%6.1%6.3%6.5%6.8%7.1%7.2%

8.0%8.1%8.4%8.4%8.7%

9.8%10.0%

12.7%16.8%17.1%17.2%

21.1%22.7%

24.6%26.1%

Bachelor's degree or higher Age 65 to 74 years Age 55 to 64 years

Female Age 75 years and over

Some other race Asian

Some college or associate's degree Age 45 to 54 years

WhiteHispanic or Latino origin (of any race)

Female with own children under 6 years Age 25 to 44 years

Population 16 years and over Male

High school graduate (includes equivalency) Age 20 to 24 years

Less than high school graduate With any disability

American Indian and Alaska Native Two or more races Age 16 to 19 years

Persons below poverty level Black or African American

REGIONAL LOCATION QUOTIENT

Higher than Average Employment

Natural Resources and Mining (2.92)

Leisure and Hospitality (1.37)

Education/Health Services (1.34)

Lower than Average Employment

Professional/Business Services (0.51)

Manufacturing(0.57)

Information (0.62)


Source: Bureau of Labor Statistics Location Quotient Calculator, 2014

OCCUPATIONS IN DEMAND

Healthcare

Office and Administrative Support

Computer and Mathematical

Construction and Extraction

Installation, Maintenance, and Repair

Production


Source: MN DEED Occupations in Demand (OID); Northwest Wisconsin Skills Gap Analysis; Northwest Workforce Development Area Long Term Occupations Projections, 2012‐2022

CONCLUSIONS


• Mining is very important.

• Regional labor force is declining.

• Opportunity to expand employment.

• Many highly demanded occupations require no higher education.

CONSUMER CONFIDENCE INDICATORS

Brian HonnessUniversity of Wisconsin-Superior


• INDEX OF CONSUMER SENTIMENT (ICS)Consumer outlook on personal finances, business conditions and consumption spending

• INDEX OF CURRENT CONDITIONS (ICC)Gauges current state of the economy

• INDEX OF CONSUMER EXPECTATIONS (ICE)Projects future economic and financial conditions

© 2015 REIF • National Bank of Commerce • University of Wisconsin-Superior



104.71

102.23

103.23

100

101

102

103

104

105

106

107

Fall 2013 Spr 2014 Fall 2014 Spr 2015 Fall 2015

ICS

ICC

ICE

PUBLIC SURVEY (RANDOM SAMPLE)



96.72

95.1395.77

949596979899

100101102

Fall 2014 Spr 2015 Fall 2015

ICS

ICC

ICE

SURVEY of REIF PARTICIPANTS (NON-RANDOM SAMPLE)



Indicator Public Survey (Random)

REIF Survey(Non-Random)

ICS Weakening short-term economic outlook

Weakening short-term economic outlook

ICC Economy is slowing down

Economy is slowing down

ICE Expectations of future economic slowdown

Expectations of future economic slowdown

REGIONAL EQUITY INDEX

Donald SimmonsUniversity of Wisconsin-Superior


Methodology• Equally weighted index• 12 companies with significant employment in the region


Allete Cliffs Natural Resources Polymet

Ascena Retail Group Enbridge Energy Partners Sappi Limited

Calumet Ikonics UnitedHealth GroupCanadian National Railway Louisiana-Pacific US Steel


-10%-5%0%5%

10%15%20%25%30%

AlleteAscena

Retail Group Calumet

YTD Returns vs. Previous Performance

YTD Average-60%-40%-20%

0%20%40%60%80%


YTD Average



-70%

-50%

-30%

-10%

10%

30%

SappiLimited

UnitedHealthGroup US Steel


YTD Average-70%

-50%

-30%

-10%

10%

30%

CanadianNationalRailway

Cliffs NaturalResources

EnbridgeEnerrgyPartners


YTD Average

EnbridgeEnergy Partners


$70

$100

$130

$160

$190

$220

$250

REI

S&P 400


REI VS S&P 400 INDEX

PerformanceIndicator

Major Findings

REI vs S&P 400 REI underperformed compared to the benchmark

Value Line® • REI: Average to below-average expected price performance over the next 6-12 months

• Average to above-average risk• Average to below-average expected price

change over the next 3-6 monthsMorningstar®

Overall implications

Average short interest ratio of 6.68

Expectations of continued economic slowdown and underperformance

SUMMARY OF FINDINGS


BUSINESS CONFIDENCEINDICATORS

Cassidy Jayne

The School of Business and Technology, Economics DepartmentThe College of St. Scholastica

GENERAL BUSINESS CONFIDENCE

Last 6 Months• Company Outlook

– 55% experienced an overall improvement

– 17% saw their outlook worsen

• General Activity – 47% experienced a

moderate improvement

Next 6 Months• Company Outlook

– 42% anticipate no change– 41% expect a moderate

improvement

• General Activity – 41% anticipate no change– 39% expect a moderate

improvement

© 2015 REIF • National Bank of Commerce • The College of St. Scholastica

SPECIFIC CONFIDENCE INDICATORS

Last 6 Months• Sales Revenue

– 52% saw moderate increases

– 18% experienced an overall decrease

• Profits– 39% saw moderate

increases– 18% experienced an

overall decrease

Next 6 Months• Sales Revenue

– 47% anticipate moderate increases

– 38% anticipate no change

• Number of Employees– 22% anticipate a moderate

increase – 8% expect a moderate

decrease


FACTORS LIMITINGBUSINESS ACTIVITY

Competition in Own Sector 36%Demand 34%Cost of Labor 26%Gov’t Policy 19%Shortage of Skilled Labor 18%Weather Activity 13%


THE IMPACT OF SKILLED LABOR


13.6 15.0

4.06.0

9.3

49.447.7

51.3

56.0

44.7

32.5 33.3

43.3

36.0

42.7

3.31.3 1.3 2.0 2.7

General Level ofBusiness Activity

Number ofEmployees

Selling prices CapitalExpenditures

Sales Revenue

Perc

enta

ge o

f Tot

al R

espo

nden

ts

Specific Business Indicator

Moderately Decrease

No Change

Moderately Increase

Signifigantly Increase

TEXT YOUR QUESTIONS at any time during this presentation to

218.721.8318

ANDREA CHARTIER

© 2015 REIF • National Bank of Commerce

Career Counselor The College of St. Scholastica

Andrea assists and supports college students as they explore and pursue their Career paths. Previously, Andrea was responsible for building and developing community resources for jobs and internships through TwinPortsConnex and the NORTHFORCE initiative.

TRENT JANEZICH


Executive Director, Advanced Minnesota for the Northeast Higher Education District (NHED)

Previously, Trent served as the director of Arrowhead University Consortium for NHED, where he launched and implemented the Iron Range Engineering program.

MARI KAY-NABOZNY


Chief Executive Officer, Northwest Wisconsin Workforce Investment Board, Inc. (NWWIB)

Mari oversees and carries out the Federal Workforce Innovation and Opportunity Act in 10 Northwest Wisconsin counties.

Skills Gap Defined As:


"A skills gap is a state of the labor market characterized by a significant misalignment of the occupational competencies, including knowledge, skills, and abilities (KSAs), required by employers and those actually held by workers."

Source: NWWIB 2015 Skills Gap Study

TEXT YOUR QUESTIONS at any time during this presentation to

218.721.8318

RESOURCESNational Bank of Commerce

nbcbanking.com

The College of St. Scholastica

Robert Hoffman, Ph.DAssistant Professor of Economics

[email protected]

University of Minnesota Duluth

Monica HaynesDirector of the Bureau of Business

and Economic [email protected]

University of Wisconsin Superior

Rubana Mahjabeen, Ph.D.Assistant Professor of Economics

[email protected]

Sakib Mahmud, Ph.D.Assistant Professor in Sustainable

Management and [email protected]

Zamira S. Simkins, Ph.D.Assistant Professor of Economics

zsimkins@ uwsuper.edu


BREAKOUT SESSION – Room 205


Judy AsplingLaura is associate vice president of communications & engagement at maurices. She develops strategic corporate

Laura Sieger

Judy is a human resources professional with Charter NEX films. She has been with the plastic film manufacturer

communications for internal and external audiences, leads cross-functional teams and manages charitable and community relations activities.

since it was a small start-up in 1998. In 2006, Judy moved into human resources, where she continues today.

SAVE THE DATE

Tuesday, March 29, 2016

DECC Harbor Side Ballroom

Special Topic – Cyber Security

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