Ernie Goss Grow Quotations

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 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.

Manufacturing job losses in the second half of 2005 pushed Arkansas' overall job growth for the fourth quarter to zero. However, Arkansas firms ... benefiting from the opening of the Japanese and other Asian beef markets, and J.B. Hunt Transport, profiting from the U.S. economic expansion, will drive Arkansas job growth higher in the first half of 2006.

The Mountain States region experienced growth significantly higher than the rest of the nation. The region added 53,000 jobs, an annual growth rate of 2.9 percent, in the first half of 2005 but added only 41,000 jobs, an annual growth rate of 2.2 percent, in the second half of the year.

Strong growth among firms in business and professional services and truck transport offset somewhat weaker reports from manufacturers for March.

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.

The most recent rate increases, and a rate hike at its next meeting, in my judgment will slow growth to an unacceptably low rate for the region and the nation.

Increases over the past two months point to solid growth into the second quarter of this year.

The rate at which our Asian trading partners open their borders to U.S. beef will be an important factor affecting growth for the state in 2006.

The trend in economic reports from supply managers in our survey has been fairly positive since October of last year following some of the negative shipping impacts from Hurricane Katrina. Companies with strong ties to the state's growing ethanol industry reported solid growth for February but were very optimistic about future economic growth for this sector.

Survey results, while somewhat weaker than the rest of the nation, continue to point to growth for Missouri in the months ahead. Of course challenges and opportunities related to automobile industry restructuring will be an important driver in the near and intermediate term.

The Kansas economy began the year on a somewhat softer note than the rest of the region. However, firms reported solid job growth for January with durable goods producers detailing much stronger conditions than non-durable goods firms in the state.

Of course the loss of the 2,400 GM jobs will hurt the Oklahoma and Oklahoma City economies. However, given the provisions of job banks, the full force of the negative impacts will not be felt until 2008. In the interim, our survey points to solid growth with positive job gains in the months ahead for Oklahoma's economy.

It's clear the overall economy is solid and pointing to growth in the upcoming months, much stronger than anticipated earlier because of energy prices and natural gas prices. We would have expected much slower growth.

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.

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.

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.

The construction industry and transportation sector in Kansas have pushed 2005 growth into the very strong range. However, higher interest rates will slow growth for both industries in the first half of 2006. The rate at which our Asian trading partners open their borders to U.S. beef will be an important factor affecting growth for the state in 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.

I expect higher commodity prices and escalating short-term interest rates to push regional growth down significantly in the second half of 2006.

Job growth in Missouri has definitely slowed over the past several months. In terms of hiring, Missouri experienced January job losses. However, strong new orders should convert to an improving employment picture in the months ahead. Durable goods producers were much more bullish in their economic assessments for January than non-durable goods manufacturers.