Slower growth is projected for 2008 over 2007 in the Upper Midwest, according to economists at the Federal Reserve Bank, Ninth District, which covers Montana, North Dakota, South Dakota, Minnesota, Iowa, and part of Wisconsin.

Minnesota's economy is expected to drop off sharply to an annual rate of less than 1 percent, according the state's economist. This rate decrease means less revenues for schools, roads, health care, and other services that Minnesotans have come to expect.

The state's job growth outpaced the national average for years and will lag in every major sector in 2008. Unemployment dropped in October to 4.7 percent, which matched the U.S. rate. Nonfarm jobs decreased by 0.1 percent, but five sectors are showing job growth into 2008: Natural Resources & Mining, Financial Activities, Education & Health Services, Leisure & Hospitality, and Government.

After two months of losses, construction gained 600 jobs last October and will continue to gain in 2008, mostly in commercial and industrial sectors. Construction of mining operations in northern Minnesota will add thousands of workers. Minnesota Steel Industries, now owned by Essar Global in India, will be hiring about 2,000 construction workers needed to complete the $1.6-billion project. A new mining operation was announced for 2008 that will open a mine for a variety of minerals, including iron ore and gold.

Minnesota's housing slump was particularly severe because the construction industry makes up a larger part of the state's economy than it does nationally. This decline will reverberate to other areas, such as retail, that affect consumption behavior. In manufacturing, Minnesota shows overall weakness in a sector that once thrived.

Given the aging infrastructure of Minnesota's bridges and roadways, the Minnesota Department of Transportation has compiled a list of 200 major projects for 2008. But adequate funding and allocations remain uncertain because of the high priority for completing the new I-35W bridge and federal funding issues, which have been bogged down in Congress for months.

Construction of the I-35W bridge is well under way with $123.5 million in federal emergency funds from the U.S. Department of Transportation. However, until the remainder of the $234-million total cost is received to complete the bridge by December 2008, MnDOT may have to reallocate existing budgets to make up the difference.

Another continuing major project for MnDOT this year is the rebuilding of the I-35W/Crosstown Highway 62 through south Minneapolis. Work in 2008 will involve demolition and construction of more bridges, and building retaining walls and noise walls.

Other major construction includes both the University of Minnesota football and Minnesota Twins baseball stadiums. Pouring concrete and erecting steel for the open-air, horseshoe-designed University stadium began recently and will continue throughout 2008. Nearly all concrete and steel work is scheduled for 2008 on the $390-million, 40,000-seat Minnesota Twins stadium in downtown Minneapolis. However, infrastructure and financing expenses will increase the total cost to an estimated $522 million.

The Northstar commuter rail line will continue construction with new stations, equipment and infrastructure improvements. The $320-million project receives funds from the U.S. Department of Transportation, MnDOT, three county rail authorities, and Metropolitan Council. In addition, the Minnesota Twins will pay for right-of-way to Burlington Northern Santa Fe. When completed in 2009, the Northstar line will link Minneapolis with northern suburbs and cities for 40 miles to help reduce congestion on freeways, commuter time and gas.

Minnesota has $294 million left unspent from the last legislative session and $1 billion in reserves and cash flow. The Federal Reserve Bank in Minneapolis stated that Minnesota's productivity is up, world economy is growing to buy state goods, and the state has maintained low inflation — all good fundamental economic signs.

North Dakota's business index rose to its highest level at 76.1 and will increase slightly in 2008. A strong farm income and ethanol production helped lead business activity in the region. A recent survey by Creighton University indicates that North Dakota added 4,000 jobs by the end of 2007 and will continue to increase as alternative energy becomes a major employment force in the state.

Cost of doing business is extremely competitive in North Dakota where land, building, utility, and labor costs are low compared to the rest of the nation. Utilities are low cost because of the state's extensive supply of coal, oil and other natural resources. Wind energy is beginning to be another source as wind farms are built in various areas of the state.

North Dakota ranks eighth in oil production in the U.S. and has the largest lignite coal reserve in the world. Natural gas production is at its highest level in 20 years at 190 million cubic feet a day. The state will continue to develop an alternative energy plan that could fund more road and highway projects and transportation around the state.

The 2007 Legislature authorized $115 million in property tax relief to homeowners, land owners and commercial property owners for two years, 2007 and 2008, to be claimed as a credit on income tax returns or special schedules.

Major state construction projects include the Liberty Memorial Bridge connecting Bismarck and Mandan, Interstate 20 in Fargo, North Broadway Phase II in Minot, Highway 1804 in Bismarck, and a proposed project on Main Avenue in West Fargo. The Liberty Memorial Bridge will be completed in 2008 and the old bridge will be removed. Construction of the bridge plaza in Bismarck will begin in 2008 with completion in 2009.

North Dakota is carrying over $404-million apportionment from 2007 to 2008. The state anticipates about $246 million in authorized apportionment for 2008. For state highway construction, North Dakota will spend $207 million, which includes bridge replacement and safety improvements. In the urban highway construction program, the state designated $54 million; in county roadway construction program, it will spend $22.7 million and in transportation enhancement projects, the state designated $12.8 million.

Five federally recognized American Indian tribes and one Indian community occupy land located partially or wholly within North Dakota. They are the Mandan, Hidatsa & Arikara Nation (Three affiliated Tribes), Spirit Lake Nation, Standing Rock Sioux Tribe, Turtle Mountain Band of Chippewa, Trenton Indian Service Area, and Sisseton-Wahpeton Oyate. Tribes work with the state on construction projects when needed in their areas, and a program for mostly American Indians helps to place them on construction projects and other available jobs.

North Dakota has difficulty finding interested and qualified employees in various sectors, including construction. However, even without skilled employees, the state will continue its economic growth.

South Dakota continues to have the highest per capita income in the nation. In the past two years, rising oil prices have adversely affected highway construction and maintenance projects. Petroleum-based products have doubled and tripled in price while available funding remained relatively constant. As a result, some scheduled projects have been deferred with a ripple effect on previous years' projects.

The state divides its estimated total highway and road expenditures into four improvement types. For 2008, $413,349,000 will be spent in four areas:

1. Construction/Reconstruction— $183.2 million. This includes complete rebuilding of a highway, bridge or street on an existing or new location and widening of an existing facility.
2. Resurfacing and asphalt surface treatment — $163.4 million. Addition of pavement layer(s) over existing roadway surface.
3. Rehabilitation — $38.1 million. Roadway or structure work, including replacement of joints, repair of joins, substantial pavement undersealing, strengthening bases or sub-bases, or restoration of rest area and bridge decks.
4. Safety — $28.5 million. Projects will improve safety at hazardous locations through the highway systems.

Some major road projects are the Spearfish Canyon Rock Fall, Highway 44 East in Rapid City, Exit 61 and Exit 52 off Interstate 90 in Rapid City, Sturgis Road and various Sioux Falls area projects, including state highway 11, state highway 115, and new traffic signals and ADA upgrades on Western Avenue. Minor construction projects continue around South Dakota.

Another project is the re-opening of the Homestake gold mine in Lead that closed in 2003. Last July, the National Science Foundation selected Homestake as the site for the proposed Deep Underground Science and Engineering Laboratory. The state science authority is re-opening the mine for two underground laboratories, one operated by the science authority and the other operated by the National Science Foundation.

Preliminary work to prepare the mine is beginning but any major construction of the lab requires seven or eight years to complete. The cost of construction could be $250 million, and South Dakota has raised $116 million to start one lab at the middle level of the mine. The NSF awarded $15 million to create a detailed plan for the labs over the next three years. The project is led by a physicist at the University of California at Berkeley who proposed the lab to be built at Homestake.

Homestake will be used as a deep lab to protect experiments from the noise of cosmic radiation, allowing scientists to single out faint evidence of elusive particles and other physical phenomena, such as neutrinos.

Canadian Pacific Railway's recent purchase of Dakota, Minnesota & Eastern Railway gives another boost to South Dakota's economy. CP Rail will expand and improve the line through South Dakota to export its coal and grains to other areas of the country and bring in revenue. Construction projects are planned in 2008.

Alternative energy is another area providing economic expansion in South Dakota. Ethanol production, biodiesel fuel and wind farms to produce energy have propelled the state to be more of an energy exporter, a goal in the state's 2010 Initiative. Construction of ethanol plants and wind farms has jumped in 2007 over 2006 and will continue in 2008.

An Energy Task Force was created in 2004 to examine new and existing electrical markets, power plants' and wind farms' tax structures, new transmission infrastructure, wind leases, interstate cooperation, and future energy development. The state will continue to research its potential to produce alternative energy and become a major exporter of clean energy sources to help its economy and the environment.