Fed Beige Book-Minneapolis: Econ Grew Moderately -1 | ForexLive

WASHINGTON (MNI) ? The following is the latest Beige Book survey of
economic conditions in the Federal Reserve?s Ninth District, published
Wednesday:

NINTH DISTRICT?MINNEAPOLIS

The Ninth District economy grew moderately since the last report.
Increased activity was noted in consumer spending, tourism, professional
services, construction, real estate, and agriculture. Growth was also
positive, but slightly slower than in the previous reporting period, in
the manufacturing, energy, and mining sectors. Some tightening was noted
in labor markets, and wage increases were moderate. Price increases were
modest, and some decreases were noted.

Consumer Spending and Tourism

Consumer spending grew moderately. Same-store sales at a
Minnesota-based retailer increased 2 percent in June compared with a
year ago. Sales at a North Dakota mall during June were up over 5
percent compared with a year earlier. A number of new retail store and
restaurant openings were reported in North Dakota. Recent new car and
truck sales were up at dealerships in Montana, according to a
representative of an auto dealers association. However, recent
same-store sales at a Minnesota-based women?s apparel retailer were down
15 percent from a year earlier.

Tourism activity increased from a year ago. Tourism officials in
the Upper Peninsula of Michigan predicted that summer activity will
surpass last year?s levels. In northwestern Wisconsin, resorts were full
and sales at other tourism-related businesses posted strong increases.
Visits to the Minnesota Zoo for the 12-month period ended in June
reached record levels, according to officials. A Minnesota-based travel
agency noted that leisure travel was down somewhat, while corporate
travel was steady; overall revenue was up. However, restaurant and hotel
owners in the Duluth, Minn., area noted a decrease in visits following a
major flood in the region.

Construction and Real Estate

Commercial construction activity increased since the last report.
The value of new commercial building permits issued in Fargo, N.D., so
far in 2012 increased compared with the same period in 2011. Commercial
permits in the Sioux Falls, S.D., area were up substantially in value in
June from a year earlier. Numerous new commercial building projects were
in early stages in the Minneapolis area, including a new headquarters
for a large utility and a major expansion at an area hospital.
Residential construction increased from a year ago. The value of
residential building permits in the Sioux Falls area in June more than
doubled from a year earlier. Residential permits increased in value and
number in the Minneapolis-St. Paul area in June; the single-family
sector saw a surprising rebound. Several large multifamily housing
projects were under way in Fargo.

Commercial real estate markets saw continued strength. A
Minneapolis property on which a mixed-use development has been stalled
since 2003 recently sold to a new investor. Prices for commercial
property in the oil boom areas of the District continued to increase.
Residential real estate market activity increased as well. Home sales in
May were up 27 percent from the same period a year ago in the
Minneapolis-St. Paul area; the inventory of homes for sale was down 31
percent, and the median sales price rose by 11 percent. In the Sioux
Falls area, May home sales were up 32 percent, inventory was down, and
the median sales price rose nearly 3 percent relative to a year earlier.

Services

Activity at professional business services firms grew somewhat
since the last report. According to a Minneapolis Fed ad hoc survey,
District professional business services firms noted gains in revenue and
profits over the past three months, while the amount of space occupied
held relatively steady. Respondents were mildly optimistic about the
upcoming three months regarding revenue and profits. Some contacts noted
that competition in the sector has lowered prices and driven down
margins, yet projects were more complex and customer expectations were
higher than five to 10 years ago.

Manufacturing

Growth in the District manufacturing sector moderated slightly from
the last report. A June survey of purchasing managers by Creighton
University (Omaha, Neb.) found that manufacturing activity expanded in
Minnesota and the Dakotas, but at a slightly slower pace than in recent
months. A medical equipment maker near Minneapolis announced an
expansion into a previously idle facility. A pipe producer announced
plans to build a new plant in South Dakota. Plans moved ahead for a
potential $1 billion fertilizer plant in North Dakota that would make
use of natural gas from the state?s oil patch.

Energy and mining

Activity in the energy and mining sectors slowed slightly. Oil and
gas exploration activity decreased in North Dakota and Montana since the
last report, but oil production was at record levels. Reports surfaced
of ethanol producers idling plants in response to sharp increases in
corn prices in late June and early July, along with declining gasoline
prices. District coal-mining operations also saw reductions in demand as
electricity generation shifted toward natural gas. A mining company
suspended its involvement in a joint project to develop a copper, zinc,
and gold mine in Michigan?s Upper Peninsula. However, hard rock mines in
Montana and iron ore producers in northern Minnesota remained busy.

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** MNI Washington Bureau: 202-371-2121 **

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Source: http://www.forexlive.com/blog/2012/07/18/fed-beige-book-minneapolis-econ-grew-moderately-1/

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