After growing at a very strong pace in 2005, we are now detecting a slowdown in the pace of growth. Just as nondurable goods manufacturers reported improving economic conditions, durable goods producers detailed a pullback in economic conditions for the month. I expect this slower pace of growth to continue into 2006. |
As in much of the region, weather played an important role in pushing the state's index higher. Businesses in South Dakota reported undertaking and completing construction projects for the month that would ordinarily have been sidelined until spring. |
As we have seen in the past few months, our inflation gauge, and most national inflation indicators, point to somewhat lower inflationary pressures ahead. |
Businesses in North Dakota definitely benefited from much warmer weather for the month according to comments from businesses in our survey. It is difficult to separate out the impacts of weather from more fundamental economic factors, but even so, our survey still points to solid growth in the months ahead. |
Businesses located in the Northwest portion of Arkansas tended to report stronger economic conditions than businesses in other parts of the state. However, I do expect reasonably solid job growth for most areas through the second quarter of this year. |
Despite difficulties for Missouri's vehicle manufacturing sector, durable goods manufacturers overall continue to report expanding economic conditions. I expect the state's telecommunications industry to experience much improved growth for 2006. |
Despite difficulties for Missouri's vehicle manufacturing sector, durable goods manufacturers overall continue to report expanding economic conditions. I expect the state's telecommunications industry to experience much improved growth for 2006. On the other hand, due to increasing and stiff competition from casinos in other states, I anticipate a subdued 2006 for Missouri's casinos. |
Despite the announced closure of the two Tyson plants, Nebraska's confidence index stood at a regional high of 70.2. Certainly, the rising fortunes of the state's ethanol and renewable energy industry have buoyed businesses in this industry or firms with close ties to this industry. |
For 2006, Minnesota's big economic stories will be problems related to the continuing cutbacks in the U.S. auto industry, a turnaround for the telecommunications industry, and finally a weakening of Minnesota's construction industry. Nonetheless, our survey points to still solid growth for the first half of 2006. |
For example, greater reliance on ethanol by the U.S. will make many areas in the region clear economic winners. |
For most states in the region, unemployment rates moved lower and job growth higher as manufacturers, finance firms and energy providers details growth. However, telecommunications remained weak and construction cooled in January. |
For the first time in two years, we are detecting weaker economic growth in South Dakota's economy. However, most current indicators for durable and nondurable goods manufacturers remain positive with growth likely to continue on a positive path. The growth for 2006 will be lower than that for 2005. |
Higher interest rates are cutting a bit into confidence, and now oil prices are going back up to post-Katrina levels. |
However, the real danger is that the warm weather may have fooled many into thinking the economy is doing better than it is. |
I expect higher commodity prices and escalating short-term interest rates to push regional growth down significantly in the second half of 2006. |