From Creighton's Heider College of Business, January 4:
December survey highlights:
- For a second straight month, the regional Business Conditions Index declined, but remained in growth range.
- Approximately 36% of manufacturers reported that finding and hiring qualified workers would be their top challenge for 2021. This compares to 70% recorded last year at this time.
- On average, supply managers expect to receive an average wage and salary increase of 2.1%. This compares to 2.5% recorded at this time last year.
- The wholesale inflation gauge indicates elevated inflation in the pipeline.
- Comparative 2020 economic performance from top to bottom: (1) Nebraska, South Dakota, Arkansas, Missouri, Kansas, Oklahoma, Iowa, Minnesota and (9) North Dakota.
OMAHA, Neb. (Jan. 4, 2021) – For a second straight month, the Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, fell, but remained above growth neutral for the month.
Overall index: In April of this year, COVID-19 pushed the overall index to its lowest level in 11 years. Since April, the overall index has climbed above growth neutral 50.0 for seven of the past eight months. The Business Conditions Index, which ranges between 0 and 100, dropped to 64.1 from November’s 69.0.
“Creighton’s monthly survey results have mirrored the national manufacturing survey results indicating that the manufacturing sector has been expanding at a solid, but slowing, pace since sinking to a post-2008 recession low in April. Even so, current output in the regional and U.S. manufacturing sectors remains well below pre-COVID-19 levels,” 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 regional employment index remained well above growth neutral for December, but fell to 57.7 from 63.1 in November. Since the onset of COVID-19, U.S. Bureau of Labor Statistics data indicate that regional nonfarm employment is down 655,000 jobs, or 4.7%, and regional manufacturing employment is off by 66,000 jobs or 4.5%.
Since bottoming out in April, regional manufacturing has gained back roughly 43,000 of the initial manufacturing job losses.
In December, supply managers were asked to identify the greatest 2021 economic challenge for their firm. Approximately 36% reported that finding and hiring qualified workers would be their top challenge for 2021. Another one fifth, or 20%, named rising input prices as the biggest 2021 challenge.
On average, supply managers expect to receive an average wage and salary increase of 2.1%, with one-fifth of respondents anticipating no 2021 wage increase.
Other comments from December survey participants:
“Besides rising prices as the top challenge for 2021, a close second is finding qualified workers throughout our supply chains.”
“Based on our customer orders we have in hand, 2021 is going to be a record year as far as products sold. I am concerned the supply base cannot keep up. Also, the price of steel is a large concern.”
Wholesale Prices: The wholesale inflation gauge for the month slipped to a still inflationary 81.5 from 84.8 in November.....
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