Economy looks good in Austin

Published 12:00 am Tuesday, January 30, 2001

Recent reports on the state of the economy nationwide have indicated a possible crisis on the horizon, but in Austin growth and cautious optimism remains the order of the day.

Tuesday, January 30, 2001

Recent reports on the state of the economy nationwide have indicated a possible crisis on the horizon, but in Austin growth and cautious optimism remains the order of the day.

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As Mayor Bonnie Rietz stressed in her recent "State of the City" address, "Austin experienced its biggest year ever in 2000 in terms of construction valuations and building permits." Expectations for 2001 are on par with 2000, with a multiplicity of development on the horizon.

She cited several building projects in the city as proof of the current progressive economic outlook, including Murphy Creek, the restoration of the Wold Drug Store at Main Street North and Second Avenue NW, the Chauncey Apartments and the opening of the new SPAM Museum.

Jeanne Sheehan of the Austin Area Convention and Visitors Bureau said "lodging tax for this year showed a 12 percent increase over last year." Group visits to Austin increased by about 50 percent, she added.

The November-December 2000 issue of the Minnesota Employment Review showed Mower County’s seasonally adjusted unemployment rate was between 2.0 and 2.6 percent, far below the national rate of 3.8 percent. Surrounding counties, such as Freeborn, Dodge and Steele are closer to the national average. Neighboring Olmsted County’s rate was even below Mower County’s – at 1.9 percent.

The report also stated special trades construction; business, health, social and education services; air transportation, amusement and recreation, eating and drinking; public administration; and membership organizations are the 10 industries with the greatest employment growth.

Car sales in Austin are holding steady, although used car sales are outnumbering new sales.

Bob Otterson of Mel Saxton’s Austin Ford-Lincoln-Mercury said "new cars come with incentives to override" the cost benefit of purchasing a used car. He also stressed that new car inventories are high nationwide, not just in Austin.

Otterson added news reports about higher gas prices and a looming recession have curbed customers’ buying somewhat.

Late 2000 employment outlook figures compiled by Manpower Inc. of Albert Lea showed staffing increases and decreases should stay steady during February and March, based on projections by employers in Austin and Albert Lea.

Manpower’s figures are obtained through telephone interviews of public and private employers.

"In our survey of hiring intentions for the January-February-March period," Mary Hacker of Manpower said, "10 percent of firms queried plan staffing level increases, another 10 percent project reductions and 80 percent expect no changes during the winter months."

On Jan. 23, Minnesota Secretary of State Mary Kiffmeyer announced the number of business transactions filed through her office reached a yearly all-time high of 74,335 in 2000.

"There was a lot of activity among limited liability companies which are thought to be the wave of the future because of the flexibility allowed in the way they are organized and taxed," Kiffmeyer said.

"Even as we hear nationally of a possible economic downturn and see the national economy having a negative impact on certain areas of our own state, Minnesotans are showing a ‘can-do’ attitude about succeeding as entrepreneurs," Kiffmeyer said.

According to Hacker’s figures, non-durable goods manufacturers (pharmaceuticals and food products) expect to hire additional employees, while wholesale-retail trade employers expect to reduce their current personnel. Durable goods manufacturers plan to evenly increase and decrease employment in their companies.

"Austin is a center for food production," George Brophy of the Development Corp. of Austin said. The fact that these non-durable goods are a staple of life means that Austin benefits from the growth Hormel Foods Corp. is exhibiting.

"Non-durable goods experience neither the rise nor the fall at the maximum rate as durable goods do," Brophy said. An example of a city economy dependent upon durable goods would be Detroit – one of the centers of the auto industry.

For those having difficulty finding employment, the question may not be where you’re looking but what you’re looking for. The fields of health care, education and information technology currently are suffering from a lack of candidates.

Brophy stressed that nothing nationally is occurring that will dampen Austin’s capacity to survive and even modestly grow – except for the city’s own inability to find the supply needed to handle the food demand. The supply is the workers Austin needs to maintain food production, which will wane as the city’s aging population reaches retirement age.

"Are we positioned as a community to continue to induce people to be here?" Brophy asked. "That is not nearly as easy as it might appear."

He went on to say inducing people to come to Austin and then providing them with affordable housing and effective transportation and education when they arrive is the key to keeping Austin economically stable.

"If we do well, we will flourish," Brophy added.