Housing industry looks dim
ST. PAUL -- A slumping housing industry could be a major Minnesota economic problem, the state economist said Wednesday. "Minnesota's housing permits have fallen extremely drastically," Tom Stinson said. If the housing industry does not rebound, ...
ST. PAUL -- A slumping housing industry could be a major Minnesota economic problem, the state economist said Wednesday.
"Minnesota's housing permits have fallen extremely drastically," Tom Stinson said.
If the housing industry does not rebound, construction companies and their workers will be hurt, he added. And beyond that, the lumber industry would be affected.
The Minnesota housing industry has not slowed significantly since the 1930s, he added.
Rep. Loren Solberg, DFL-Grand Rapids, said he has seen signs of timber industry problems in northern Minnesota. And even when he was looking for a Twin Cities apartment, he said the rental market is tight, a sign that fewer people are buying homes.
"We may lose a whole construction season of building homes," Solberg said.
Rep. Frank Moe, DFL-Bemidji, said the housing industry needs to improve, but he said lawmakers' options are limited.
"Some of this stuff is beyond our control," Moe said. "There's little the Legislature can do about the national housing market."
But, he said, there are steps that can be taken at a state level. That could include authorizing the sustainable forestry initiative and making sure the Department of Natural Resources has funding to fill forester vacancies
Thanks to a burgeoning ethanol industry in Minnesota, the outlook is optimistic for farmers, Stinson said.
"Virtually all" the rise in corn activity comes courtesy of the ethanol production, he said. Barring low yields, he predicted that the "farm economy's likely to be pretty good."
Rep. Al Juhnke, DFL-Willmar, agreed.
"Everything's strong in the farm sector right now," said Juhnke, who chairs a House agriculture committee.
Still, he cautioned that strategic investments - like those made by the state in ethanol - need to continue if the farm sector is to remain strong. That means harnessing energy from renewable sources like wind and digesters, Juhnke said.
"We see that as a rosy future on the agricultural landscape," he said.
Stinson said he does not expect a recession, but economic growth could be slow.
Tuesday's drop in stock markets was not a significant factor in long-term economic forecasts, Stinson said. But it did take him by surprise.
"If you would look at my portfolio, you would know we didn't expect that," he joked.
Mike Longaecker and Don Davis work for Forum Communications Co., which owns the Bemidji Pioneer.