Mid-America Index Slumps Below Growth Neutral: Declines in Exports and Hiring Pushed Index into Negative Territory
August survey highlights:• Overall index sank for the fourth time in the past five, months moving below growth neutral. Lower export orders and hiring pushed index into negative territory.• Business confidence slumped to 35-month low.• Export orders and imports slumped for the month.• Approximately 44% of supply managers indicated that tariffs and trading issues were the greatest economic challenge for their company in the next 12 months.• Six of 10 supply managers reported their customers would be paying the greatest share of tariffs.OMAHA, Neb. (Sept. 3, 2019) – The August Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, fell below growth neutral for the first time since November 2016.Overall index: The Business Conditions Index, which ranges between 0 and 100, slumped to 49.3 from July’s 52.0. After 32 straight months of above growth neutral readings, the region’s overall index moved below 50.0 in August.“The regional economy expanded at a slower pace than the rest of the nation for the first eight months of 2019,” 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.
“Weakness in the region’s farm and manufacturing sectors produced by tariffs and a global economic slowdown pulled regional growth below that of the nation. Based on our manufacturing survey over the past several months, I expect overall growth to slow and potentially move into negative territory in the months ahead,” said Goss.Employment: The August employment index plummeted to 45.1, its lowest level in 34 months, from 56.3 in July.
...MUCH MORE“For the last 12 months, Mid-America employment growth has been 0.7% compared to a much higher 1.5% for the U.S. This month, as in July, approximately 40% of supply managers reported that the shortage of qualified workers was the greatest economic challenge for their company for the next 12 months,” said Goss.One supply manager reported that tight labor markets are making it difficult to expand, while another said, “We’re struggling to hire enough workers to meet our demand.”Wholesale Prices: The wholesale inflation gauge for the month indicated reduced inflationary pressures with a wholesale price index of 63.4, down from 71.9 in July. “Tariffs have to date only had modest impact on our wholesale inflation gauge,” said Goss....
