Incremental - but solid - economic growth expected in 2012by Annie Baxter, Minnesota Public Radio
St. Paul, Minn. — The Federal Reserve Bank of Minneapolis projects solid economic performance for Minnesota in 2012.
Statistical models forecast 3 percent employment growth in Minnesota between the fourth quarter of this year and the same time period in 2012, Minneapolis Fed officials said.
The forecast looks at the six states in the Fed's 9th District. A survey of business owners in the district showed strength in manufacturing next year, said Fed economist Toby Madden.
"We surveyed manufacturers, and they expect that their output is going to be up; their production levels, their sales, their profits are going to be up," Madden said. "And as a result of higher orders, they're looking to increase investment in plant and equipment as well as increase employment. So it looks like 2012 will be another solid year for manufacturers."
Homebuilding activity is not likely to rebound as quickly, and will continue to be a "downer," with decreased new home starts expected for the coming year throughout most of the district, Madden said. A survey of 400 business leaders provided more pessimistic results.
"We asked business leaders, 'What do you expect is going to happen to homebuilding in your areas,' " Madden said. "Across all the geographic areas except North Dakota, they're looking at decreases in homebuilding in 2012."
Manufacturing in the district will likely pick up, as will personal income and employment, Minneapolis Fed officials said.
Madden says a drought could hurt the district's agriculture district in 2012. However, the U.S. Department of Agriculture expects prices for agriculture products, such as wheat, corn, soybeans, hogs and steers to increase next year, a positive sign for producers.