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Regional Economic Digest
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Economic Update By Jason Henderson The Tenth District economy continued to expand in the second quarter of 1997, but at a somewhat slower pace than early in the year. Manufacturing activity expanded modestly and the farm economy continued to improve. Energy posted further gains and construction activity rose seasonally. The unemployment rate dipped slightly while employment levels declined marginally. Back to top Regional Economic Digest home Survey of Tenth District Manufacturers Manufacturing activity in the Kansas City Federal Reserve District expanded in July but at a slightly slower pace than earlier in the year, according to a quarterly survey of manufacturers across the district. The survey takes a snapshot of manufacturing the first month of each quarter by asking plant managers about a variety of manufacturing indicators (Table 1). By most measures, manufacturing showed a modest expansion during July. Inventories of raw materials and finished goods were generally unchanged at district factories. Prices received for finished goods held steady, while prices of raw materials increased modestly. Overall, manufacturing remained stronger than a year ago, and manufacturers were optimistic about the outlook for the next six months. Back to top Regional Economic Digest home Survey of Agricultural Credit Conditions Agricultural credit conditions in the Tenth District continued to improve during the second quarter of 1997, according to a survey of 344 agricultural bankers. A large wheat harvest and a positive outlook for corn and soybeans lifted farmland values and fueled demand for farm loans. Loan repayment rates were down seasonally, while interest rates edged up, reflecting the movement in money market rates. Back to top Regional Economic Digest home How Important Are Small Businesses In The
Tenth District? Small businesses were widely recognized in the 1980s as the driving force behind economic growth. One benchmark study estimated that small firms accounted for 80 percent of all new jobs in the nation in the late 1970s. Analysts predicted that small businesses would continue to provide most new jobs as the economy became more service-oriented and therefore dominated by firms that tended to be smaller in scale. The desire to promote small businesses as an engine of job growth was partly responsible for efforts in the mid-1980s to overhaul the tax system and deregulate business. Since then, election campaigns and congressional debates have continued to place small businesses and job growth together in the public eye. Today, improved access to additional data allows a comprehensive look at the importance of small businesses in the Tenth District economy. Small firms continue to be the primary source of total jobs in the district, accounting for 60 percent of all jobs in 1994. But not all sectors of the district economy favor small firms. For instance, small firms in 1994 accounted for less than a third of all manufacturing jobs in the district. Therefore, in their efforts to promote job growth policymakers should not overlook the contribution that large firms can make in some key sectors. Back to top Regional Economic Digest home Economic Indicators |