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Made in MN 2008: Boosting Minnesota's Economy in Tough Economic Times

November 25, 2008 By Lee Egerstrom, Economic Development Fellow

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Minnesota is in a recession. It always makes economic sense to support our local manufacturers and retailers when possible. It makes even more sense now. The need to stimulate the local economy has become more urgent than it was a year ago when Minnesota 2020 issued its first Made in Minnesota report and put its Minnesota Gift Guide on line with hundreds of local products and businesses. Here is what has changed this holiday season.

Buying Minnesota Made Products Benefits the State Economy

  • According to the Mid-America Business Conditions report by Creighton University, new product orders in Minnesota and the surrounding states dropped 14 percent in October, and production at plants dropped nearly 13 percent, indicating a downturn for state retailers.
  • The National Retail Federation predicted a 4 percent increase in November-December stores sales last year, with Minnesota's share factored at $9.49 billion. Actual sales, however, fell short. Now, initial forecasts from NRF envision November-December sales growth of only 2.2 percent. Retail industry analysts have forecast even weaker sales growth ranging from 1.3 to 1.7 percent for this season. That would fall short of stimulating an economic recovery.
  • According to the Minnesota Finance Department, there were 20,600 retail establishments operating in the state during 2007. These stores employed 301,700 people last year.
  • The Department of Finance also predicts Minnesota's economy will continue to weaken through the spring of 2009.
  • Overcoming weak sales, however, is the added benefit of buying local. Each $1 spent with a local, independent business keeps 68 cents at home and circulating in the Minnesota economy. About 43 cents of the $1 spent at national chains that do not have headquarters in the state stays behind to boost the local economy.
  • Findings from last year's report found that if Minnesotans spent 25 percent of their holiday shopping budget on Minnesota made products, the impact would ripple through the economy like a tidal wave and have small and local business people hiring more employees. That would make more than a $2 billion infusion into the state economy. Even a 10 percent increase in purchases of local products would stimulate employment and increase entrepreneurs' purchases from local suppliers.

Buying Minnesota Made Products Saves Money and Energy

  • Given the enormity of Minnesota's turkey, pork and dairy industries and other food sectors, we probably do eat more local products than most Americans. But still, the typical holiday meal travels 1,200 miles from farm to feast table during the holidays. Holiday gift items often travel that far and farther.
  • For many households, gifts this year will include upgraded television sets in preparation to February's switch to digital broadcasts.  Those purchases will necessarily come from elsewhere -almost all from abroad. Only a conscientious effort to buy Minnesota made gift items can cut back on packaging and transportation costs, and keep retail profits working at home.

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