Updates: Business news, local relevance
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Fed forecasts moderate recovery
According to the Minneapolis Fed’s forecasting model and results from recent surveys, the moderate economic recovery of the past few years will continue through 2013. The exception is North Dakota and areas servicing oil drilling, where strong economic growth is expected. Employment levels will expand moderately, while unemployment rates will decrease somewhat, according to forecasting models. Some signs of improvement are noted in home building, while the services sector and tourism are expected to perform well. Meanwhile, a warm spring followed by plenty of rainfall has crops positioned for a strong harvest this fall. After posting decreases over the past few years, construction employment increased 0.7 percent in May, which is good news for a troubled sector affected by housing activity. From 2006 to 2010, district housing units authorized decreased well over 50 percent, and construction employment decreased 24 percent in district states over the same period. There were other signs of housing recovery as well. For example, the Minnesota Association of Realtors reported that May home sales were up 11 percent from a year earlier and that home prices increased 10 percent. ■
Manufcturers fairly upbeat
Minnesota manufacturers seem mostly optimistic about the industry in the coming year, with 85 percent saying they expect production and employment levels to increase or stay the same, according to a survey by the Minnesota Department of Employment and Economic Development and the Federal Reserve Bank of Minneapolis. In the random survey of Minnesota manufacturers conducted in November, 44 percent of those that responded expect orders to grow in 2013 and one-fourth expect to hire more workers. Some 87 percent expect exports to increase or stay the same, 92 percent expect productivity to increase or stay the same, 70 percent expect profits to increase or stay the same and 76 percent expect investments in plants or equipment to increase or stay the same.
Target price matches on-line competitors
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Target Corp. announced plans to price match top online retailers year-round, including Amazon.com, Walmart.com, BestBuy.com and Toysrus.com. Target stores will also price match items found on Target.com. The new policy will combine Target’s previous price adjustment and competitor ad match policies into one price match policy. If a customer buys a qualifying item at a Target store and then finds the identical item for less in the following week’s Target circular or within seven days on Target.com, Amazon.com, Walmart.com, Bestbuy.com or Toysrus.com or in a local competitor’s printed ad, Target will match the price.
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U.S. Bancorp sees earnings rise
U.S. Bancorp saw a 5.2 percent rise in fourth-quarter earnings, but the regional banking giant’s revenue failed to meet Wall Street’s expectations. Minneapolis-based U.S. Bancorp, the No. 5 commercial bank by assets, said it earned $1.42 billion, or 72 cents a share, last quarter, compared with a profit of $1.35 billion, or 69 cents a share, a year earlier. Excluding one-time items, it earned 75 cents a share, matching consensus calls from analysts. Revenue inched up 0.2 percent to $5.11 billion, narrowly trailing the Street’s view of $5.16 billion. U.S. Bancorp said its mortgage revenue soared 57 percent to $476 million, but fell by a deeper-than-expected 8.9 percent from the third quarter.
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Wells Fargo loses $1.4M case
A unit of Wells Fargo & Co lost a $1.4 million securities arbitration case against Stifel Nicolaus & Co, whom it alleged improperly recruited a group of brokers from a New York City area branch office, according to a ruling. The decision by a Financial Industry Regulatory Authority panel ends a long dispute that began in 2009 and played out during 24 days of hearings. Wells Fargo Advisors also named a total of 18 Stifel advisers as respondents in the case, which started as three separate cases that were later combined. At issue in the case is a practice known as “raiding,” according to the ruling. A raiding claim is typically made when a firm loses 30 percent to 40 percent of the production — the amount brokers generate in revenue during a year — from a branch office in one swoop or over a short period of time. Wells Fargo also alleged, among other things, that the brokers and Stifel interfered with its business relationships and breached their employment contracts. But experts say there can be a fine line between smart recruiting and raiding. ■
Xcel honored for aid
Xcel Energy was among utilities honored by the Edison Electric Institute with the association’s “Emergency Assistance Award” for outstanding efforts in mutual-aid assistance for power restoration work after Hurricane Sandy in the Northeast and the Super Derecho storm that brought crews to Ohio last summer. The award is presented annually to U.S. and foreign-based member companies to recognize outstanding efforts in restoring electricity service that has been disrupted by severe weather conditions or other natural events. Winners were chosen by a panel of judges following an international nomination process, and awards were presented during EEI’s chief executives meeting. Xcel Energy assisted two utility companies in the wake of Hurricane Sandy, which devastated parts of the East Coast in late October and early November. The hurricane hit utility infrastructure hard from New York to the Carolinas, leaving behind extensive damage and debris, complicating accessibility to restoration sites. Xcel Energy sent more than 230 employees and contractors from all four operating companies. MV
MN Valley Business • February 2013 • 19