2. Minnesota has largely lagged the national recession Short story: Housing troubles elsewhere hit durable goods manufacturers, wood products, etc. first in Northeast MN. Growth slows in MN, but St. Cloud OK Pricing issues elsewhere eventually land on Twin Cities Credit crunch comes, hits manufacturers again This time, it hits Central MN Financial losses damage retail, leisure and hospitality Health and education sectors not strong enough to overcome these drags

3. No sign of turnaround in Minnesota Moderate expansion Steep decline Expansion ends

4. Not a bad 2008 New data shows Minnesota outperformed the nation in 2008 For year 2008MNUSA Employment growth -2.0%-2.2% Real per capita GDP +1.2%-0.4% Personal income per capita +4.1%+2.9% Unemployment rate (July ‘09) 8.1%9.4%

5. There is no sign of local turnaround yet

6. Probability of recession through end of 2009 is 99%

7. Factors contributing to continued recession Late entry to recession locally (Aug. 2008) Heavy share of employment in manufacturing New manufacturing data for August is upbeat, though Construction, particularly residential, continues to decline

8. Causes for optimism Not many, but: Incorporations and LLC/LLP formation beginning to increase Firms look to be slowly expanding workweek – do not know about overtime, though Minnesota Leading Economic Indicators, from Creighton University Survey, bounced up strongly in August from low levels in June and July. Purchasing manager confidence high Hospitality sector seems to have stabilized. But not retail, yet

9. Over to Rich for the survey What are business owners thinking?