N.D. Economy Goes Against The Grain While most states are feeling the effects of the national recession, North Dakota has so far escaped relatively unscathed. It continues to have a growing economy, a low unemployment rate and a $1.2 billion budget surplus.
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N.D. Economy Goes Against The Grain

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N.D. Economy Goes Against The Grain

N.D. Economy Goes Against The Grain

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MICHELE NORRIS, host:

Well, times are tough in Michigan and almost everywhere else, but that's not true for every state. Dave Thompson of Prairie Public Radio has the story of one state with an overflowing treasury.

(Soundbite of State of the State address)

Governor JOHN HOEVEN (Republican, North Dakota): Ladies and gentlemen, the state of our state is strong.

(Soundbite of applause)

DAVE THOMPSON: That's North Dakota Governor John Hoeven, delivering his early January State of the State address. Compared with other states, North Dakota is doing quite well. The state has a $1.3 billion surplus. It has low unemployment. And the economy continues to expand.

Mr. SHANE GOETTLE (Director, North Dakota's Department of Commerce): Well, we're not unaffected by the national recession and the global recession. North Dakota is faring much better than other states.

THOMPSON: Shane Goettle is North Dakota's director of commerce. He says one big reason the state is doing so well is it diversified its economy.

Mr. GOETTLE: Whether it's energy or value-added agriculture, the commodity prices have been good. That's helped boost up Main Street. Tourism's been good with Canadian traffic coming down across the border this year, and that helped boost up retail. And even with - in the energy sector, we've got a lot of diversity, as well. We've been focused on both traditionals and renewables.

THOMPSON: During the late 1980s when farm prices were dropping and farm foreclosures rising, the state embarked on a plan to diversify the economy by supporting agricultural processing, attracting high-tech business, and touting the state's quality of life and low cost of living. It also encouraged instate entrepreneurs. That led to the Great Plains Software company, which is now a part of Microsoft. In fact, it's the second largest Microsoft facility in the U.S., sitting on 80 acres in south Fargo. Even with today's announcement of layoffs, Microsoft is still expanding here, although a small percentage of jobs in Fargo will likely be affected.

Mr. DON MORTON (Site Leader, Microsoft Fargo Campus): We have close to 1,600 people in Fargo.

THOMPSON: Don Morton is site leader for the Microsoft Fargo campus.

Mr. MORTON: We're adding 60,000-square-foot addition onto our original building, and we're adding a brand new office - a brand new 120,000-square-foot office building.

THOMPSON: Morton said the Midwest and especially North Dakota is a low-cost place to do business.

Mr. MORTON: We also have very high productivity and very low attrition. Attrition is what really hurts a company, in particular a technology company where you have to do a lot of training. There's a lot of learning. High attrition is very costly.

THOMPSON: North Dakota has also seen tremendous growth in energy, specifically oil production. Lynn Helms is North Dakota's Mineral Resources Director.

Mr. LYNN HELMS (Director, Department of Mineral Resources, North Dakota): We happened to be located above the largest onshore oil resource that the USGS has ever evaluated in the lower 48 states.

THOMPSON: Helms is talking about the Bakken Shale Formation. The Federal government estimates it holds more than four billion barrels of recoverable oil. North Dakota's economy is also benefiting from some smart banking decisions. The state's lenders generally did not make subprime mortgage loans and still have money to lend. But business and government leaders say North Dakota will still likely feel the effects of the national recession, though not as harshly as other states. State Budget Director Pam Sharp says she's watching the consumer confidence index.

Ms. PAM SHARP (Director, Office of Management and Budget, North Dakota): In North Dakota, as well as the rest of the nation, people have lost money in their 401(k) accounts, their investments. And people could start feeling - because their investments have decreased - they could start feeling like they don't want to spend as much money. And so we're kind of watching to see if that happens. We have not seen any indication of that here in North Dakota.

THOMPSON: Business leaders here say they're optimistic that North Dakota will hold its own in the recession and be likely to come out of it even stronger. For NPR News, I'm Dave Thompson in Bismarck, North Dakota.

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