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

NINTH DISTRICT–MINNEAPOLIS

The Ninth District economy grew at a steady pace since the last
report. Consumer spending, tourism, residential real estate and
construction, services, manufacturing, energy, mining and agriculture
saw increases. Commercial real estate was flat at low levels, and
commercial construction activity was slow. Some signs of strengthening
were noted in labor markets. Wage increases were subdued, and overall
prices remained level.

Consumer Spending and Tourism

Consumer spending increased moderately since the last report. A
major Minneapolisbased retailer reported that same-store sales in April
and March combined were up 3 percent compared with a year earlier. A
Minnesota-based manufacturer of outdoor maintenance equipment reported a
strong start to the spring selling season. Meanwhile, a North Dakota
mall reported that April sales were up about 3 percent, and a Montana
hardware store operator noted that recent sales were above year-ago
levels. Retail sales dipped slightly during April in some areas in part
due to a relatively early Easter. For example, traffic at two
Minneapolis area malls was down 3 percent and 7 percent, respectively,
in April after increasing in March.

Automotive dealers in the Minneapolis-St. Paul area reported that
car sales and maintenance and repair business were up from a year
earlier. April new car sales were up significantly higher from March in
Montana and the Upper Peninsula of Michigan, but were down slightly in
western Wisconsin.

Tourism contacts are optimistic for the summer season. An official
in the Upper Peninsula reported that tourism traffic was starting to
look pretty good and a strong summer season is expected. The number of
nonresident visitors to Montana is expected to increase 2 percent
compared with a year ago after a flat year in 2009, according to state
tourism officials. Inquiries about summer tourism activities were strong
in Duluth, Minn. However, recent leisure bookings by a Minnesota travel
agency were down during April and May, and advanced bookings for the
summer season were slow.

Construction and Real Estate

Commercial construction was weak. April nonresidential permits fell
dramatically in Sioux Falls, S.D. Several contacts in infrastructure
building noted that the volume of publicly funded work is declining.
However, a commercial builder in northeastern Minnesota and northwestern
Wisconsin said that while most sectors were weak, demand for industrial
construction was stronger. Residential construction continued to
rebound. Housing permits in the Minneapolis-St. Paul area nearly doubled
in value in May from the previous year; April permits rose 20 percent in
value in Sioux Falls. The number of permits issued in and around
Bismarck, N.D., increased from a year earlier.

Commercial real estate was slow. The amount of unused space in the
retail market in Minneapolis increased by 135,000 square feet during the
first quarter. An industry contact in northern Wisconsin noted that
nearly every sector in his area was overbuilt. Residential real estate
saw continued slow growth. April home prices increased in
Minneapolis-St. Paul for the fourth consecutive month, the longest
period of increasing prices since 2004. Brokers in Fargo, N.D., and
Duluth, Minn., noted increased activity in April as home buyers took
advantage of the federal tax credit before its expiration. Contacts
around the District reported increased housing short sales for
distressed properties.

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

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