March 18, 1992
Economic conditions in the District appear to be strengthening somewhat. Retail, housing, and automotive sales have all improved. Agriculture seems on net to be doing reasonably well, and tourism remains strong. Labor market conditions remain weak, while conditions in construction and manufacturing appear mixed.
Employment, Wages, and Prices
Minnesota's December unemployment at 5.3 percent was 0.3 percent
above both its month- and year-ago levels. Minnesota's
nonagricultural employment was up 0.76 percent in December relative
to a year-ago. Job growth during this period occurred primarily in
services (up 2.75 percent), government (up 1.15 percent),
transportation (up 0.55 percent), and wholesale and retail trade (up
0.32 percent), while employment in manufacturing (down 1.12
percent), and construction (down 3.79 percent) declined
substantially. Montana's December unemployment rate of 7.3 percent
was 0.1 percent below its month-ago level, but substantially above
its year-ago level of 6.7 percent. On the bright side, the December
level of Montana's nonagricultural employment was 1.10 percent above
its year-ago level, with substantial gains being posted in
construction (up 11.58 percent), finance, insurance and real estate
(up 1.50 percent), and government (up 1.13 percent). North Dakota's
December unemployment rate at 4.1 percent was slightly above its
year- and month-ago levels of 3.8 and 4.0 percent respectively.
However, North Dakota's December level of nonagricultural employment
was up a robust 1.56 percent relative to its year-ago level, with
mining and construction employment leading the way (each up 4.65
percent). December's unemployment rate in the Upper Peninsula of
Michigan of 11.1 percent was above its year-ago level of 9.3
percent.
Consumer Spending
Major District retailers have reported February sales increases, in
comparable stores, of 6 to 35 percent, relative to a year ago. The
strong Canadian demand in border areas appears to be continuing,
despite recent Canadian government attempts to impose higher taxes
on U.S. goods. Motel occupancy rates in towns like Fargo, North
Dakota, are at close to full capacity, and new motels are being
constructed to accommodate more Canadian visitors.
Auto sales have also revived, apparently bucking the national trend. Dealers are reporting new car sales increases of up to 10 percent and year-to-date sales increases of as much as 11 percent relative to a year ago. New truck sales were reported to be up to 17 percent higher in February and over 20 percent higher for the year-to-date relative to a year ago.
Home sales have recently improved in the District. February sales of single-family homes in the Minneapolis-St. Paul area were up 49 percent relative to a year ago. The median February sales price is not yet available, but in January it was up 4 percent. Fargo- Moorhead had record real estate sales in 1991, with sales of existing single-family homes up 3.4 percent over the previous year.
Tourist activity has been generally good throughout the District. Crossings over the Mackinac Bridge onto the Upper Peninsula rose 9.6 percent in January, setting a record for the month. The total number of bridge crossings in 1991 was 4.9 percent above the previous year's record level. Heavy early snowfall got winter recreation off to a good start, but lack of consistent snowfall has hurt many areas. Late snowfalls in northern and western sections of the Upper Peninsula have greatly improved conditions there. Both Yellowstone and Glacier Parks had record years for tourism. The recent running of the 20th American Birkebeiner cross-country ski race is estimated to have brought $4.5 to $6.5 million in tourist spending to western Wisconsin.
Construction and Manufacturing
Conditions in the District's construction industry have been mixed.
January's level of new housing permits in Minnesota was up 34.8
percent relative to a year ago, but still 36.6 percent below that of
two years ago. Commercial construction in the state has also slowed,
and there remains a large overhang in office space. Montana, and
North and South Dakota reported generally strong construction
activity.
Conditions were mixed in the District's manufacturing industries. In Minnesota there were continuing reports of layoffs. Average weekly hours in the state were at 40.5 in January, down relative to the 41.0 level of the previous month, but above the 40.2 level of a year ago. In South Dakota manufacturing was reported to be doing quite well.
Resource-Related Industries
Conditions in the District's agricultural sector have been fairly
good, with price declines offset by good crop yields. Total crop
output in North Dakota in 1991 was 2 percent above the previous
year's record level. South Dakota had a record soybean crop in 1991.
Minnesota had near-record corn and soybean crops. However, January's
Minnesota Index of Prices Received was at its lowest level since
April of 1988. The all-farm-products subcategory was down 2.29
percent from a year ago. Substantial price declines occurred for
livestock (down 19.0 percent), and poultry products (down 8.7
percent). Minnesota's average of crop prices received was up 3.6
percent in January relative to a year ago, while the average of
dairy product prices received was up 19.4 over the same period.
Unseasonably warm weather damaged the sugar beet crops in Minnesota
and North Dakota, where beets are stored outdoors during the winter.
The lumber industry in the District continues to experience difficulties due to environmental issues, and in particular the as- yet-to-be-determined set aside for wilderness areas. Conditions in the District's mining industry appear to be mixed. Exploration expenditures in Montana were $5 million in 1991, down from $35 million in 1990. Copper producers appear to be doing well, however, with smelters running at capacity.