September 23, 1992
Late summer economic conditions in the Ninth District were steady after slight declines reported in the previous Beige Book. General merchandise, auto and home sales show signs of strength. Tourism was reported to be strong. Construction is running above last year's levels. These positive factors are offset to some extent by weak labor markets, with layoffs in manufacturing and mining reported in late August and early September. Finally, cold, wet weather threatens District crop production.
Consumer Spending
General merchandise spending in the District is showing some signs
of strength. The opening of the Mall of America in a Minneapolis
suburb was a retailing milestone. One of the largest malls in the
United States, the facility attracted more than 1 million shoppers
in its first week.
Further signs of strength include a regional electronics retailer reporting August year-to-date sales 15 percent above the same period in 1991. Sporting goods stores in the Upper Peninsula of Michigan towns of Ishpeming and Marquette report late summer sales 10 to 20 percent above last year. Minnesota sales tax remittances for August are reported to be "as projected," somewhat above levels a year earlier.
Automobile sales are strong, with new car titles issued in Minnesota in August up 13 percent over 1991. A manufacturer reported that year-to-date car sales were even with 1991 but that truck and pickup sales were up substantially.
In spite of unusually cool weather, the summer tourist season was reported to be good. Montana experienced a very strong season with visits at 14 top attractions, including Yellowstone and Glacier national parks, running 7 percent above 1991's rates. In South Dakota, tourism was reported to be down slightly from the previous year, but still rated as "great" by an official of an industry association. Crossings of the Mackinac and Sault Ste. Marie bridges ran above 1991 levels.
Home Sales and Construction
Both residential and non-residential building activity are up.
August single-family home sales are reported up 15 percent from a
year ago for Minneapolis/St. Paul. New residential construction also
is reported to be good in South Dakota and Montana. In July, in
Minnesota and the Dakotas, contract awards for new public school
buildings were up substantially from a year ago, more than
offsetting declines in commercial/industrial building.
Manufacturing and Mining
Several new manufacturing plants opened. These include a 220-
employee glass plant in Menomonie, Wis., an electronics assembly
plant and a boat factory in North Dakota, and a small furniture
factory near Billings, Mont. Hurricane Andrew increased demand for
building products, especially oriented-strandboard, a plywood
substitute that is produced at several plants in Minnesota and
Wisconsin.
But these expansions are offset to some extent by recent layoffs. About 100 employees of a paper mill in Ladysmith, Wis., were laid off in a permanent closure. Other layoffs included tractor manufacturing workers in Fargo, N.D., and computer assemblers in Minneapolis/St. Paul.
Recent layoffs also trouble the mining sector. Some 760 workers were laid off at an Eveleth, Minn., taconite mine triggering furloughs for 50 railroad workers. Montana gold mining is reported to be slow. Coal shipments from Duluth-Superior for this year are down 20 percent relative to 1991, due to reduced demand at generating plants in the Detroit area.
Labor Market Conditions
Labor markets are weak. Unadjusted non-farm numbers suggest
employment was steady through July, though the layoffs noted above
may point to District employment declines in August and September.
Non-farm employment numbers are above the same period a year
earlier.
Agriculture
Cool weather continues to trouble the agricultural sector. Grain
harvesting in North Dakota is running some 50 percent behind normal
due to continuing rain. Actual or expected yields are very good for
most crops across the region with the exception of the Upper
Peninsula of Michigan, though crop maturity has been slowed
significantly by the cool weather. All reports stress the need for a
late first frost to avoid crop damage, particularly to corn,
soybeans and sugar beets.