MINNEAPOLIS -- Toro Co. has come up with an austere slogan to help battle its way through a national recession: More fax, less FedEx.

The Minnesota-based lawn mower manufacturer knows that American consumers, battered by layoffs and worried about the future, will fix their old machines rather than buy new ones come this spring. Executives at Toro, with sales of $750 million last year, expect sales to fall anywhere from 4 percent to 13 percent in 1991.

So last year, Toro officials began settling in for what they see as a long, severe economic downturn. And as part of their first cost-cutting review, they were astonished to find that they were spending $45,000 a month in overnight mail deliveries. That's when the order came down to warm up the fax machines. Toro ordered other spending cuts and announced a 5 percent cut in total employment.

"We've pulled back and said, 'Let's plan now for the worst.' We're seeing it as an 18-month recession, fairly deep. It's not a blip or a hiccup," said Toro Vice President Dennis Himan.

Toro's cautious yet modest cuts reflect a consensus in the Minneapolis-St. Paul business community that a national recession has arrived, but that it will not undo most of the hard-won gains of the 1980s.

Regional economists and executives predict that unemployment will rise and per capita incomes will take a beating through most of 1991. But the same officials are convinced that local employment, income and other economic indicators will stay above national averages because of a diversified employment base, strong exports, continued health of the agricultural economy and the relative strength in the regional banking industry.

"I see it as a slowdown here, but not a recession," said Sung Won Sohn, economist for Norwest Corp., the largest Minneapolis-St. Paul bank and a regional banking power. "If we do go into a recession, it will be somewhat milder than a national recession."

The Twin Cities economy is dominated by Fortune 500 manufacturers of high-technology products and exporters of food products -- two industries that should remain healthy in the midst of a national recession, Sohn said.

"This is certainly one of the most resilient areas in the world," said Chris Steffen, chief financial officer of Honeywell Inc., who cites a strength in diversified industries and export-oriented manufacturers like Minnesota Mining and Manufacturing Co., Cargill Inc. and General Mills Inc. "That tends to give us a balance that's not available in Newark or Dallas."

Of all the local companies, Honeywell may have the best ear to the ground when it comes to hearing first rumbles of a national recession. The company specializes in producing thermostats and environmental controls for homes, office buildings and industrial facilities, and thus keeps careful track of construction and expansion activity throughout the nation. And in general, said Steffen, the Midwest remains relatively strong.

Still, the slowdown nationally has forced Honeywell to trim 5,000 of its 69,000 jobs worldwide since mid-1989. Such early cutbacks, combined with similar moves last year by Minneapolis technology firms Control Data Corp. and Unisys Corp., were the first signals a local downturn had begun.

Local retail and service firms were quick to reduce inventories, costs and expectations. Dayton Hudson Corp., for example, the Minneapolis-based parent of Dayton's, Marshall Field's and Target Stores, saw its recessionary suspicions confirmed over the Christmas season, said President Steve Watson. Sales at comparable stores were up only 2.4 percent for the Christmas period from 1989, compared with monthly sales increases of 6 percent to 8 percent before June.

Employment in the service industries remains an area of concern for local economists and government officials. In a blue-collar region of the country, Minneapolis-St. Paul has always stood out as something of a white-collar oasis because of its high concentration of Fortune 500 headquarters and manufacturers of computer and medical equipment. The layoffs at Honeywell, Control Data and other firms signaled, however, that high-paying managerial and technical jobs would be the first to suffer in the recession, officials said.

"What used to be our pride and joy has become somewhat of a liability right now," said Norwest's Sohn.

"In the last six months or so, we're seeing more and more {unemployed} high-level people," said Tom Arndt, director of placement in a suburban office of the Minnesota Jobs Service. "It's not unusual to see people in the $100,000 income bracket. These people are highly specialized and it may be hard to transfer those skills to another company."

The slump in white-collar employment will only exacerbate a local glut in top-quality office space. Downtown office vacancies stand at an undramatic 15.2 percent, but rents are falling rapidly and brokers report dozens of sellers chasing a handful of buyers, according to Roger Christiansen, director of research at Coldwell Banker Commercial Real Estate Services.

Moreover, the vacancy rate is expected to shoot up to 22 percent within two years, as downtown Minneapolis builders finish off four skyscrapers. The real estate slump, however, is not expected to mimic events in regions such as Washington, D.C., where commercial real estate woes have severely weakened local banks. Economists and financial regulators say Upper Midwest banks held to a relatively conservative lending strategy during the late 1980s, in part because they had already been burned by the near collapse of the agricultural economy earlier in the decade.

Norwest, one of the largest regional banks in the nation, racked up record net income of $281 million in 1990, up 37 percent from 1989. Its arch-rival, First Bank System Inc., reported income of $130 million for 1990, after three years of turmoil from heavy write-offs and bad bond investments.

"It is in fact the case that our banks are in better shape," Sohn said. "Commercial banks here have really not gotten into the kind of highly leveraged {projects} as in other regions."