Unemployment rates remain very low, and labor markets show continuing symptoms of tightness. Manufacturing output, while still high overall, is beginning to slacken, especially in those products or firms with substantial Asian exposure. The natural resource sectors, particularly agriculture, mining and energy development, face low prices, and drilling and mining activity is faltering. Reports of upward pressure on overall compensation are widespread, despite data showing only moderate increases in direct, cash compensation. Realtors also report strong activity in office, commercial and light industrial space.
Construction is similarly booming.
Residential building permits for the Minneapolis-St. Paul area were up 38 percent in June and 22 percent for the year, again compared to the same periods in 1997. In growing regional centers such as Rochester, Minn., Sioux Falls, S.D., Eau Claire Wis., and in the Minneapolis-St. Paul metropolitan area, strong residential building is matched by robust commercial work. The downtown areas of both Minneapolis and St. Paul show the fastest pace of large office building projects in a decade.