TWO HARBORS -- The unusually mild winter has been difficult for northern Minnesota businesses that depend on recreational snow.

Scott Larson owns the Dixie Bar & Grill near Two Harbors in Lake County. Larson says January is typically one of his best months because of snowmobile traffic. But, this year, he says business has dropped about 39 percent.

Regional economist Toby Madden with the Federal Reserve Bank of Minneapolis says there are similar stories across the north central U.S. Madden says businesses are reporting double-digit drops in revenue from last year.

Employment in the tourism sector for the three-county northeast Minnesota region is the lowest in 18 years.

Vickie Louks manages the Country Inn in Two Harbors. Louks says she has five employees who haven't worked for six weeks.

(Copyright 2011 by The Associated Press.  All Rights Reserved.)