WASHINGTON (MNI) – The following is the text of the Federal
Reserve’s Beige Book survey Eighth District summary, published




Contacts from various services firms noted a recent increase in
business. Preliminary results of the Minneapolis Fed’s annual survey of
professional services companies in May showed that sales revenue, space
usage, and profits are expected to increase over the next year. A small
North Dakota information technology firm commented that the “outlook is


Manufacturing output was up since the last report. An April survey
of purchasing managers by Creighton University (Omaha, Neb.) showed that
manufacturing activity increased significantly in Minnesota and South
Dakota and increased slightly in North Dakota. A computer component
plant in western Wisconsin planned to increase capital expenditures
significantly in 2010. An expansion of a food processing facility is
under way in North Dakota.

Energy and Mining

Activity in the energy and mining sectors increased since the last
report. Late May oil exploration increased from early April. Wind energy
projects continued to be planned and built in the western portion of the
district. Iron ore production in Minnesota increased about 5 percent in
April from March.


Agricultural activity increased. Across most of the District, crops
were planted earlier than the five-year average and are emerging at a
faster pace. However, the Minneapolis Fed’s first-quarter (April) survey
of agricultural credit conditions indicated that lenders expect overall
agricultural income and capital spending to decrease in the second

Employment, Wages and Prices

Some signs of strengthening were noted in labor markets. In
Minnesota, a shoe manufacturer recently announced plans to hire up to 80
more workers, and a manufacturer of windows and doors increased the
workweek for employees after reducing their time during the economic
downturn. About three-quarters of respondents to a Minneapolis Fed
survey of temporary employment firms in Minnesota, North Dakota, and
Wisconsin reported an increase in the number of customers and employed
workers. Placements at industrial firms showed the largest increase. At
a Montana employment office, more businesses were looking to hire
employees, but overall hiring activity remained relatively slow.

Despite signs of improvement, overall labor markets remained weak.
In Montana, a recent job fair attracted hundreds of job seekers for
openings at almost 50 companies. A wood furniture factory and chain of
stores in Montana recently went out of business, affecting over 60
workers statewide. Almost 50 workers were laid off by a defense
contractor in Minnesota.

Wage increases were subdued. According to respondents to a recent
St. Cloud (Minn.) Area Business Outlook Survey, only 18 percent expect
to increase employee compensation at their companies over the next six
months. In last year’s survey, 21 percent expected to increase
compensation. Several temporary staffing firms noted flat to lower
wages. The majority of respondents from the Minneapolis Fed’s
preliminary survey of professional business services firms indicated no
increases in wages for the next year. A nurses union in Minneapolis-St.
Paul recently approved a one-day strike in response to negotiations with
area hospitals, which had proposed to change work rules, cut pensions,
and reduce health benefits.

Overall prices remained level. Some price pressures were noted in
materials for large construction projects; however, in recent weeks,
prices for oil, copper, and some steel products decreased. In addition,
fertilizer prices were down from a year ago.

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** Market News International Washington Bureau: 202-371-2121 **

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