Natural Resources, Transportation and Economic Prosperity

Outline Economic outlook Affect on Region/Sectors: – Agriculture – Mining/Energy – Transportation Q & A

World Economy Continues to Grow Source: The Economist

2015 Country Outlook Source: IMF

U.S. economy is in a long expansion

Slow Growth is Expected in U.S. Source: Minneapolis Fed

Inflation Below Target Source: Minneapolis Fed

Unemployment Rate Steady Source: Minneapolis Fed

Optimism is High Source: Minneapolis Fed

Key Takeaway: Economy Should Grow, But… Risks! -Fiscal/ Monetary issues -Europe -China -Agriculture -Unlucky -Others?

GDP Varies by State

Source: U.S. Bureau of Economic Analysis

Source: Minneapolis Fed

Source: U.S. Bureau of Economic Analysis

Ag harvests are key 2015 Corn and Soybean yields up, Wheat harvest down Spills over into: – Energy – Transportation – Manufacturing – Wholesale/retail

Region is Interdependent “Roughly 20% of the cost of producing grain comes from oil” “From 2000 to 2011, America went from using 6% of its corn crop (the world’s biggest) to make ethanol, to 40%” Source: Economist

Source: U.S. Bureau of Economic Analysis

Source: Minneapolis Fed

Mining: Boom Bust cycles BUSTS: Continental Mine closes in in 1983, reopens in 1986, closes in 2000, reopens in 2003 BOOM: Profit sharing was huge boom to Butte economy in mid 2000’s

Source: Yahoo Finance

Source: U.S. Bureau of Economic Analysis

Transportation Rail bottlenecks  Increased Cap Ex Truck Driver shortage Bridge, road and lock infrastructure problems Leads to (in)effeciencies down the value chain.

Many industries depend on natural resources and transportation Utilities Manufacturing Trade Impact is on 27 percent of GDP

Questions?