From Creighton University's Heider College of Business, March 1:
Mid-America Manufacturing Advances Again: Half of Supply Managers Report Tariffs Making Purchasing More Difficult
February survey highlights:
- The overall index rose to its highest level since August of last year.
- Inflationary pressures cooled for the month.
- Approximately half, or 49.0 percent of supply managers, reported current tariffs and restrictions made it more difficult to purchase internationally.
- Almost one-fourth of supply managers support raising tariffs even more on imported Chinese goods.
- In 2018, the region exported approximately $5.2 billion in goods supporting almost 52,000 jobs in the region.
OMAHA, Neb. (March 1, 2019): The February 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 57.9 from January's 56.0. This is the 27th 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. Surprisingly, almost one-fourth of supply managers support raising tariffs even more on the import of Chinese goods. An almost equal percentage support reducing tariffs on Chinese imports," 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 February employment index expanded to a strong 59.0 from January's healthy 58.5."Overall manufacturing employment growth in the region over the past 12 months has been very healthy and exceeded that of the nation," said Goss. "I expect this gap to close in the months ahead as regional job growth slows more than national manufacturing job growth. Regional job growth for durable-goods producers has been approximately three times that of non-durable goods manufacturers over recent months."Wholesale Prices: The wholesale inflation gauge continues to indicate softening inflationary pressures. The February price-index plummeted to 64.1 from January's 76.3.Both Creighton's regional wholesale inflation index and the U.S. inflation gauge have weakened recently. While tariffs and expanding growth, for example, have boosted steel prices over the past 12 months, prices of other goods have pulled our inflation gauge, and the Federal Reserve's target rate below their objective."I expect slowing growth to push both wholesale and consumer inflation lower even lower in the months ahead," 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 September meetings," said Goss....
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