From Creighton U's Heider School of Business, June 3:
Trade Issues Slow Mid-America Growth for May: Trade War Making Purchasing More Difficult
May survey highlights:· May overall index declines for second straight month; trade issues identified as mounting problem.· One in eight manufacturers reported switching suppliers to avoid growing tariffs.· Almost two-thirds of manufacturers indicated trade skirmishes were making it more difficult to purchase from
abroad.· Four states, Iowa, Nebraska, North Dakota and Oklahoma recorded overall indices below growth neutral for the
month.· Export orders slumped for the month.
OMAHA, Neb. (June 3, 2019) – The May Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, fell to a still solid reading signaling positive, but slowing, growth for the region over the next three to six months.Overall index: The Business Conditions Index, which ranges between 0 and 100, declined to 54.3 from April’s 55.9. This is the second straight decline in the overall index, but the 30th straight month the index has remained above growth neutral 50.0.“The regional economy continues to expand at a positive pace,” 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. “However, tariffs and flooding across several states pulled the overall index below growth neutral for four states: Iowa, Nebraska, North Dakota and Oklahoma. I expect the latest announced tariffs against Mexico, if implemented, to push more Mid-America states into job loss territory in the months ahead.”
As one supply manager noted, “We need a measured approach to tariffs. Currently the USA lacks capacity in some types paper materials.”Other supply managers pinned the current trade situation on past U.S. presidents. As reported by one supply manger, “It's unfortunate that previous administrations allowed this to happen costing future generations a good standard of living and possibly their freedoms.”Employment: As a result of continuing worker shortages, the May employment index settled at a 52.2, but up from April’s tepid 51.1.“Recent flooding and trade issues have pushed regional manufacturing employment back to December 2018 levels. U.S. Bureau of Labor Statistics data show that regional manufacturing employment in April stood at 1,466,000, unchanged from December’s reading,” said Goss.Wholesale Prices: The wholesale inflation gauge for the month indicated modest inflationary pressures for the month with a wholesale price index of 62.8, down from 67.5 in April. “I expect tariffs and flood impacts to put a floor under the wholesale inflation index in the months ahead,” said Goss....MUCH MORE
