STRICTLY BUSINESS: ALL NOT QUIET ON BUSINESS, INDUSTRIAL FRONT

Some big things have happened on the business and industrial front in Southeast Missouri the past couple of years.

Some major happenings are under way at present.

And some big things are on the planning boards for the future.

Some of these things we can talk about, others we just wait and watch with great anticipation.

Only this week, executives of BioKyowa Inc. and Kyowa Foods issued some great news.

* A $35 million expansion, announced in 1998, has been completed and the local manufacturing facility here is at full production of farm products, including L-Lysine poultry and swine supplement and a fertilizer by-product.

* A $50 million new Kyowa Food facility will be completed this fall, to produce human food supplements.

*n The company has almost doubled its work force to 170.

Just recently Procter & Gamble made a big announcement for the area. A $350 million-plus expansion has been completed, and full-scale production is under way at the new 850,000 square-foot towel and tissue facility, located just north of the 1.2 million square foot plant that produces disposable diapers and feminine hygiene products. P&G has added more than 350 employees over the past two years and is now at 1,700 workers.

Several new restaurants have been added to scene, and another -- to be named later -- has added its name to the "coming" list. We're not at liberty to discuss the newest eatery, but it will be a familiar name to area residents.

Ditto to a couple of big manufacturing names that are looking at the area, and an area manufacturing company involved in an expansion program that will add 50 jobs to its payroll.

Meanwhile, the business scene is a busy one, with changes in ownership, and some changes in location and new business starts. (See "Business and Industry" article on today's business pages).

Beige report

Reports from the Federal Reserve's 12 districts indicate that solid economic growth is continuing, but with some signs of slowing from the rapid pace earlier in the year.

In Minneapolis, "economic activity remains hot," and in Chicago and Richmond, "growth is strong." In the remaining nine districts, including the that in St. Louis, growth is characterized as "moderate to steady."

This, in a nutshell, describes the content of the "Beige Book" report, which is issued eight times annually.

The section for the Fed's 8th District highlights economic developments in Eastern Missouri, all of Arkansas, Western Kentucky, Western Tennessee, Southern Illinois, Southern Indiana and Northern Mississippi.

The Beige Book, used by businessmen everywhere, is best described as a collection of information compiled primarily from various business and community leaders and is put together as a short-term snapshot of how the economy is doing.

The Federal Reserve uses it as one of many tools to help determine the direction of monetary policy.

Worried that the economy has been growing too fast and could spark inflation, the Federal Reserve has boosted interest rates six times since last June to slow things down a bit.

The Fed meets next week to discuss interest rate policy and economists are offering mixed opinions on whether it will raise rates again or leave them unchanged.

A number of recent economic reports, including unemployment, home sales and retail sales, indicate that the Fed's rate increases are beginning to work.

The nation's unemployment rate ticked up to 4.1 percent in May from 3.9 percent in April and employers actually cut jobs, something economists viewed as good news to the Fed, which has been particularly concerned that the United States' tight labor market will eventually lead to wage and price inflation.

In a tight labor market, employers have trouble finding qualified workers to fill openings. While that's good for workers, economists worry that employers will recruit workers with big increases in wages and benefits, added costs that companies could pass along to consumers in the form of higher prices.

Outside of softening in some home and vehicle sales, business conditions in the 8th District remain steady overall. Motor vehicles sales are down from a year earlier, in some cases substantially. Higher interest rates and gasoline prices are frequently cited as causes. Retail sales, on the other hand, are up from a year earlier, although many contacts report that sales fell below expectations, primarily because of sales to online vendors.

High fuel prices are pinching profits at trucking firms. Home sales and construction have slowed as interest rates have risen. Credit standards for loans have not changed recently, but demand for some real estate and consumer loans has weakened. Drought-like conditions are still the norm in most parts of the district, even after some rainfall in late May provided temporary relief.

Retailers report that sales during April and May in the district are up about 4 percent on average from a year earlier. Department stores showed the strongest growth, up almost 8 percent in some cases, while gift and specialty stores recorded sales declines.

Contacts report stable business activity in the district, although tight labor markets are still a major problem for nearly all industries. Many firms are coping by recruiting overseas workers to fill positions. Hotels and retail stores report offering career counseling, job training and child care to attract employees.

Labor shortages and fuel prices notwithstanding, contacts report steady business activity. Numerous firms are expanding or moving into the district, among them many high-tech companies. An online customer support firm, which recently opened in St. Louis, will create 600 jobs by year's end. Two Internet companies are opening in Louisville, together creating about 150 jobs. Six other expansions and openings in Louisville and Memphis will bring about 650 jobs to the district in the next few months.

A handful of closings have also occurred. An abrupt closing by a Memphis paper products producer, due to the loss of its largest customer, eliminated 300 jobs. Competition in the food industry will result in a major grocery store chain closing 20 stores within the district by July.

Drought conditions continue to affect much of the district. Although temporary relief arrived this month when widespread rainfall helped replenish topsoil moisture in all states except Mississippi, more is needed to bring subsoil moisture to adequate levels.

Despite the dry conditions, unseasonably warm spring weather allowed for an earlier-than-normal planting of the major crops in most parts of the district. The corn, soybean, winter wheat, rice and cotton crops are in good-to-excellent condition in most areas, with only isolated insect problems being reported.