Will a weakened dollar help Minnesota manufacturing?

Posted at 4:00 PM on December 7, 2009 by Paul Tosto (0 Comments)
Filed under: Jobs & unemployment, Saving & spending

The value of the U.S. dollar's been falling against the Canadian dollar the past couple months -- and that might be just the thing Minnesota manufacturers need.

Chris Farrell, chief economics correspondent for MPR News, said today he's keeping close watch on Thursday's release of international trade data.

A weaker dollar makes U.S. goods more attractive to buyers from other countries, which is good if you're trying to export. Canada is the largest U.S. trading partner and especially important to Minnesota.

"The expectation is that it (trade balance) will show a decent number," Farrell said on MPR's Morning Edition, where he share his insights on the Minnesota and national economies each Monday.

Click on the play button below to listen.

Looking at data from Creighton University's rising Minnesota economic index, "increased orders seem to be one of the factors that's driving it," he said, noting the recent drop in the value of the US dollar compared to the Canadian dollar.

"The expectation is that we'll see some improvement in manufacturing. We'll see some improvement in orders, taking advantage of the low value of the currency....and that is really to be an additional boost to the Minnesota economy," Farrell said. "Hopefully, it will start showing up in manufacturing numbers."

Minnesota's manufacturing sector has been hit hard in the recession and is down more than 40,000 jobs from a year ago.

Farrell's also watching a key index on retail chain store sales due Tuesday as an indicator of how consumers are treating retailers like Target and Best Buy. The initial Black Friday start of the holiday shopping season "wasn't as bad as it could have been," said Farrell. "But it wasn't great."

Listen to Farrell's take and post below or contact me directly if you have anything to add.

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