Iron mining and oil drilling are very strong and paper production displays some signs of recovery from the slump experienced over the last year. Retail sales of general merchandise apparently are picking up, and increased strength in vehicle sales continues. The 1996 crop was excellent in most respects, the profitability of livestock production has recovered somewhat, and farmers reportedly are increasing their spending on household and capital items. Manufacturing shows moderate growth. Tourism is the weakest sector, continuing a pattern set earlier in 1996.
Labor scarcity continues as the most-cited problem confronting businesses in the district.
Reports of increases in pay or benefits to attract entry-level workers or skilled technical specialists remain frequent, but many employers say there is no generalized upward pressure on compensation. Notwithstanding reports of compensation increases for entry-level and certain specialist employees, there are few reports of increases in the prices for goods and services. Petroleum products are one exception. Increased fuel prices are cited as a major cost increase for trucking firms and a Minnesota-based airline. One Minnesota chemical product manufacturer cites increases in the cost of all chemicals derived from petroleum or natural gas or whose production is energy intensive.