McElroy brings optimistic message during challenging economic times
WILLMAR -- Minnesota economic development commissioner Dan McElroy acknowledges the country is in challenging economic times, but describes the situation as a recession and not a depression.
"We're in a recession because it's similar to other recessions, and we kind of reserve depression for what happened in 1929-1932. This simply is not like that,'' McElroy says.
"The unemployment rate was almost four times than what it is today. The decline in gross domestic product was 10 times what it is today. This is a recession not unlike 1982 to 1983. It's serious, but let's not overreact.''
McElroy, commissioner of the Department of Employment and Economic Development, brought a more optimistic outlook for the state's and nation's economy to business people attending the sixth annual Willmar Area Development Corporation meeting Friday.
"These are not easy times. I am an absolute realist when it comes to 2009 being a difficult year,'' he said during an interview after speaking at The Oaks at Eagle Creek. "But let's not make it any more difficult by scaring people unnecessarily.''
He said economic circumstances in Willmar are better than those in the metropolitan area.
"So particularly in Willmar, this is not a time to go hide under the bed. This is a time if you're employed to think about increasing your skills perhaps if there's a degree or certification you want to finish. If you're in business, stick to doing what you do well and taking good care of your customers. Don't panic. It is challenging times, but it's not 1929.''
The concern is that if people get scared, they will quit buying, he said.
"Savings are not a bad thing. But when the savings rate goes up so much so fast, it's led to a downturn in retail sales and auto sales and home sales that's not good in the economy,'' he said.
McElroy said some industries in Minnesota are doing very well. In the area of farm equipment, Case New Holland just announced an additional line coming to Benson. He said AGCO in Jackson is doing well and he said other farm equipment companies are doing well.
"The bio-energy companies are doing well and growing. We continue to see European manufacturers come to Minnesota,'' he said. "So there are some good things happening. Industries like health care continue to do reasonably well, not without some challenges, but reasonably well.''
Although Minnesota's unemployment rate rose to 6.9 percent in December, he said nearly 93 percent of Minnesotans are still working.
"I don't mean to be unreasonably pessimistic, but realistic in the short term and optimistic in the long term,'' he said.
McElroy said his message to the business community that this is a time of opportunity for businesses that give great service and have good products.
He said Minnesota "is a big, kind of complex state. The economy isn't identical all over the state and there are some things happening that will be helpful.''
Among those are Gov. Tim Pawlenty's tax reduction proposal for job creation "and we think those are good things,'' he said. Also, Pawlenty is proposing to add significant funding for K-12 education tied to improved results "and we think that's a good thing.''
McElroy continues to believe that Minnesota is a better place to run a business. He made the same statement in a Minnesota Public Radio story on Feb. 19, 2008, about the proposed Northwest Airlines-Delta Airlines merger and comparing Eagan where Northwest has headquarters and Atlanta where Delta has headquarters.
"Minnesota has 18 Fortune 500 companies. Atlanta has 7. We have 35 Fortune 1000 companies, Atlanta has less. Nine of the largest privately held companies in the country are in Minnesota, not all in the Twin Cities. We have a highly educated work force,'' said McElroy.
"We were voted by Marketwatch.com as the best metropolitan area in the country in which to do business,'' he said.
"I would have loved to get to make the case to the Delta board of directors to have their headquarters in Minnesota. We didn't get that opportunity. They had already committed to keeping their headquarters in Atlanta and I was disappointed in that.''