Creighton University's Mid-America Business Conditions Index, Feb. 1

Not to be confused with Creighton's Rural Mainstreet Index.
From Creighton U's Heider School of Business:

Mid-America Begins 2019 on a High Note:  Business Confidence Falls to Lowest Level in Three Years.
January survey highlights:

* The overall index rose to its highest level since September of last year, the  26th straight month the Business Conditions index has moved above growth neutral.
* More than 80 percent of supply managers reported that buying from abroad was important to their firms’ success.
*Business confidence slumped to its lowest level in three years.
*Approximately 47.6 percent of supply managers expect labor shortages to be the biggest 2019 challenge.
*Tariffs and trade wars were the second most named 2019 challenges

OMAHA, Neb. (Feb. 1, 2019) – The January Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, rose to its highest level since September of last year signaling solid growth for the region over the next three to six months.

Overall index: The Business Conditions Index, which ranges between 0 and 100, climbed to 56.0 from December’s 55.2. This is the 26th straight month the index has remained above growth neutral 50.0.

“The regional economy continues to expand at a positive pace. However, as in recent months, shortages of skilled workers and international trade tension/tariffs remain an impediment to even stronger growth. More than eight of 10 supply managers reported buying from abroad was an important  factor in company success,” said Ernie Goss, PhD, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.

Employment: The January employment index expanded to a healthy 58.5 from December’s much weaker 50.0.

“Overall manufacturing employment growth in the region over the past 12 months has been very healthy at 2.4 percent, compared to a lower 2.3 percent for the U.S,” said Goss. “I expect this gap to close in the months ahead as regional job growth slows faster than national manufacturing job growth. Regional job growth for durable goods producers has been approximately three times that of nondurable goods manufacturers over recent months.”

Wholesale Prices: The wholesale inflation gauge continues to indicate elevated inflationary pressures. The January price index climbed to 76.3 from December’s 69.5.

Both Creighton’s regional wholesale inflation index and the U.S. inflation gauge are elevated.  Tariffs and expanding growth, for example, have boosted steel prices by 18.7 percent over the past 12 months. At the consumer level, the consumer price index advanced by an acceptable 1.9 percent over the past 12 months. 

“I expect lower oil prices and slowing growth to push both wholesale and consumer inflation lower,” Goss said. “Due to prices at the consumer level moving at an acceptable pace, I do not expect the Federal Reserve to raise interest before its June meetings,” said Goss.

Confidence: Looking ahead six months, economic optimism, as captured by the January Business Confidence Index, fell to 53.7, from December’s 54.1, its lowest level in three years.

“However, I expect business confidence to depend heavily on trade talks with China. Approximately one in five supply manager reported that access to international markets was essential to their firm’s success, while 34.2 indicated that this access was either important or very important. Only 19 percent indicated that access to international markets was not important,” reported Goss.

Inventories: Companies expanded inventories of raw materials and supplies for the month. The January inventory index jumped to 57.7 from December’s 47.4....         

...MORE (trade, state level, etc)