From Creighton U's Heider College of Business, November 1:
October survey highlights:
- After two months of below growth neutral readings, the overall manufacturing index bounced above 50.0.
- Despite the negative impacts of the trade war, more than half, or 54% of supply managers, support continuing or even expanding trade restrictions and tariffs on Chinese imports.
- Both exports and imports declined for the month.
- Approximately
59.5% of supply managers reported that tariffs had increased the prices
of supplies and inputs purchased by their firm.
- The lack of available workers limited job growth in the region
OMAHA, Neb. (Nov. 1, 2019) – The October Creighton
University Mid-America Business Conditions Index, a leading economic
indicator for the nine-state region stretching from Minnesota to
Arkansas, climbed above growth neutral after two straight months of
below the 50.0 threshold.
Overall index:
After two straight months of below growth neutral readings, the
region’s overall index moved above 50.0 for October. The Business
Conditions Index, which ranges between 0 and 100, rose to 52.6 from
September’s 49.1.
“For 2019, the Mid-America economy has been
expanding at a pace well below that of the nation. The trade war and the
global economic slowdown have cut regional growth to approximately
one-half that of the U.S. October’s survey results indicate that
regional growth is likely to bottom at positive, but slow rate, in
fourth quarter of this year,” 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
October employment index increased to a weak 50.0 from September’s
46.7. The availability of workers continues to constrain job growth in
the region.
“For 2019, Mid-America annualized employment growth
has been 1.0% compared to a much higher 1.9% for the U.S. Despite the
negative impact of the trade war, more than half, or 54%, support
continuing or expanding trade restrictions and tariffs on imports from
China,” said Goss.
Wholesale Prices:
The wholesale inflation gauge for the month indicated only modest
inflationary pressures with a wholesale price index of 57.0, up from
55.3 in August.
This month, 59.5% of supply managers reported that
tariffs had increased the prices of supplies and inputs purchased by
their firm. “However, tariffs have, to date, have had little impact on
our wholesale inflation gauge,” said Goss.
As reported by one supply manager, “Importers,
manufacturers and retailers are the ones paying for the tariffs. Where
is the money going that the U.S. government is collecting in tariffs?”
Even so, moderate wholesale inflation from our
survey and national surveys support the Federal Reserve current wait and
see approach. “I expect the Federal Reserve to make no additional rate
changes in 2019,” reported Goss.
Confidence: Looking
ahead six months, economic optimism, as captured by the October
Business Confidence Index, slipped to a very weak 47.3 from September’s
47.7 reading....
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