Manufacturing seen boon, bane to Great Lakes states
CHICAGO, Nov 15 (Reuters) - Manufacturing has helped some parts of the Great Lakes states as a cheap U.S. dollar beefs up demand for machinery, but hurt other parts due to a slumping auto industry, rating agency analysts said Thursday.
"It really does depend where you are," said John Kenward, a Standard & Poor's Ratings Services analyst told a Great Lakes Public Finance Conference, sponsored by Information Management Network.
He said auto industry-dependent Michigan has seen its economy hit by layoffs as U.S. carmakers struggle to stay competitive.
On the other hand, demand for machinery from China and India, fueled by a cheaper dollar, has boosted areas such as Peoria, Illinois, home to Caterpillar Inc. (CAT.N) and Moline, Illinois, with its Deere & Co. (DE.N) manufacturing, according to Kenward.
While the housing downturn has not been as severe in the Midwest as in other parts of the U.S., demand for housing components such as windows could ebb, hurting some manufacturers in Minnesota and Wisconsin, analysts said.
Hetty Chang, an analyst at Moody's Investors Service, said some Great Lakes states carry healthy fund balances and have conservative fiscal management -- positive credit factors that should enable them to weather a housing slump.
Kenward said he expected most of the Great Lakes states will retain their ratings, although problems remain for Michigan and parts of Ohio.
Michigan has already seen its ratings downgraded this year by all three Wall Street rating agencies. Moody's revised the outlook on Ohio's "Aa1" rating to negative from stable in February.
(Reporting by Karen Pierog; Editing by James Dalgleish)
((karen.pierog@reuters.com; +1-312-408-8647; Reuters Messaging: karen.pierog.reuters.com@reuters.net)) Keywords: MIDWEST RATINGS/MANUFACTURING
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