Minnesota Manufacturers Expect Stability
in Late 2002

St. Paul—Even as the nation's general economic doldrums continue, Minnesota manufacturers say they anticipate stable conditions during the second half of 2002. A survey released today by the Minnesota Department of Employment and Economic Development (DEED) reflects slightly improved performance among manufacturers relative to 2001, but most don't expect improved performance in 2002.

The survey, conducted in August and September, found that most manufacturers expected orders, production level, investment and employment to either increase or stay the same during the second half. Although most said they expect little change in most indicators before the end of this year, the percent expecting declines in these indicators remained largely unchanged from the last survey conducted in April.
“We're not out of the woods yet,” said DEED Commissioner Rebecca Yanisch. “But this survey suggests that Minnesota's manufacturers are recovering their equilibrium after the staggering blow they absorbed during the last two years. And even though their overall performance hasn't recovered fully, the manufacturers generally don't expect conditions to decline.”

While manufacturers are showing some signs of optimism within their businesses, they're less sanguine about the outlook for the state's broader economic health. The survey revealed pessimism about consumer spending, economic growth and corporate profits—with 47 percent expecting corporate profits to decrease over the last six months of 2002.

“This survey tends to support the conclusions of a similar manufacturing survey last April, which indicated that Minnesota manufacturers have seen better days,” said DEED's Analysis and Evaluation Director Bob Isaacson. “I think we can conclude from this new survey that our manufacturers are experiencing a gradual return to economic health, but that most remain cautious about predicting a quick economic turnaround.”

For more detailed results, see the news and information page on DEED's website: www.deed.state.mn.us.

The survey, prepared by the DEED Office of Analysis and Evaluation in conjunction with the Federal Reserve Bank of Minneapolis, elicited 219 responses from randomly selected Minnesota manufacturers. The sampling error is +/- 6.5 percentage points.

As one of the 12 Federal Reserve Banks, the Federal Reserve Bank of Minneapolis contributes to a variety of Federal Reserve System functions, including operation of a nationwide payments system, distribution of the nation’s currency and coin, supervision and regulation of member banks and bank holding companies, and serving as a fiscal agent for the U.S. Treasury. Additionally, the president of the Minneapolis Fed serves as a member of the Federal Open Market Committee, the monetary policymaking arm of the Federal Reserve’s Board of Governors.

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