Ernie Goss Economic Quotations

Iowa's leisure and hospitality industry and manufacturing, both durable and nondurable, ended 2005 on a very strong economic note. On the other hand, Iowa's transportation sector and construction industry are beginning 2006 on a lackluster path.

Transportation firms reported continuing economic weakness. While 2006 is likely to be a positive year for the Oklahoma economy due to an improving telecommunications sector and expansions in business service firms, the closing of GM operations in Oklahoma City will produce some fairly negative economic consequences.

The bankers in our survey reported economic weakness across the board for February with readings of 28.8 for retail sales, 44.0 for new hiring and 38.5 for home sales.

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.

Non-durable goods manufacturers, especially food processors, reported much softer economic conditions for the month. On the other hand, durable goods producers detailed solid, but not spectacular conditions for February.

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 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.

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.

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.

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.

For example, greater reliance on ethanol by the U.S. will make many areas in the region clear economic winners.

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.

No other state in the nation stands to derive as much of an economic stimulus from the opening of the Asian beef market as Nebraska. However, economic gains are going to be slow going as food-processing firms attempt to re-establish a beef presence in these foreign markets.