The overseer of the two monthly Creighton reports that we follow is economist Professor Ernie Goss.
I am not accustomed to seeing words like "soars" and "rockets" in his headlines and think he either has a new stylebook or he is trying to hammer home a point. I am leaning toward the latter interpretation.
From Creighton's Heider College of Business, March 1:
February survey highlights:
- Creighton’s regional Business Conditions Index climbed into a range indicating very strong growth.
- The wholesale inflation gauge soared to a record high.
- More than eight of 10 supply managers reported supply bottlenecks and delays for the month.
- Shipping and transportation delays were named as the top issue accounting for supply bottlenecks.
- A weak dollar bolstered new export orders.
- According to U.S. Bureau of Labor Statistics data, manufacturing wages for production workers in the region expanded by 3.6% since the onset of COVID-19 in March.
OMAHA, Neb. (March 1, 2021) – For a ninth straight month, the Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, moved into growth territory.
Overall index: The Business Conditions Index, which ranges between 0 and 100, climbed to a very strong 69.6 from 67.3 in January. Creighton’s regional manufacturing activity gauge is surging, restrained only by supply and labor constraints. From the February survey, eight of 10 manufacturing supply managers reported that bottlenecks in receiving raw materials and supplies from vendors was curtailing what would be even stronger growth.
“Since bottoming out in April, the region has regained almost one-half of the manufacturing jobs lost to COVID-19. Even so, the regional manufacturing level is currently down by approximately 50,000 jobs, or 3.5%. Creighton’s monthly survey results indicate that the region is adding jobs and economic activity at a healthy pace, and that growth will remain healthy for the first half of 2021,” 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 February, rising from 57.2 in January to 65.6 in February.
Other comments from February survey participants:
“We are in the shipping business and the demand for services both domestically and internationally is very strong.”
“The impacts of the Biden Executive Orders have yet to take effect but will start to show as the market wains and consumer confidence shrivels.”
“My comments are for my plants in Minnesota, South Dakota, North Carolina, Texas, Monterrey, Mexico, Juarez, Mexico and Brampton, Canada. In regard to the bottleneck question, I would rate all 5 items a #1, or very important.”
“Supply bottlenecks are caused by raw material (steel) availability and price, international shipping container availability. Weather caused factory shutdowns (no longer Covid).”
Wholesale Prices: The wholesale inflation gauge for the month soared to 95.2, a record high for the region and up from January’s 10-year high of 91.1.
As reported by a supply manager, “I purchase a lot of steel components and the increases are ridiculous. Steel availability is tight. I see hyperinflation coming.”
“At the wholesale level, Creighton’s survey is tracking higher and higher inflationary pressures. Metal products and lumber, for example, are experiencing significant upward pressures in prices. Over the last six months metal prices have expanded by 11% and lumber products have advanced by 16% according to U.S. Bureau of Labor Statistics data. Despite rapidly expanding inflationary pressures at the wholesale level, the Federal Reserve remains committed to its current expansionary policy,” said Goss.
Confidence: Looking ahead six months, economic optimism, as captured by the February Business Confidence Index, dropped to 50.0 from January’s 53.6....
....MUCH MORE
