From Creighton Uni's Heider College of Business, May 3:
April survey highlights:
- Creighton’s regional Business Conditions Index climbed into a range indicating very strong growth for next three to six months.
- The speed of the delivery of raw materials and supplies slowed to its lowest pace on record.
- The wholesale inflation gauge soars to a 30-year high.
- Regarding their firm’s greatest 2021 challenge, supply chain bottlenecks, higher prices and finding and hiring qualified workers were the most mentioned.
- More than nine out of 10 supply managers, or 93%, reported supply bottlenecks, or delays for April.
OMAHA, Neb. (May 3, 2021) – For an eleventh 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 b7..9etween 0 and 100, soared to its highest level since initiation of the survey almost three decades ago. The index climbed to 73.9 from March’s very strong 68.9. Creighton’s regional manufacturing activity gauge is surging, but supply bottlenecks and labor shortages continue to restrain growth.
More than nine out of 10 supply managers, or 93%, reported supply bottlenecks, or delays, for April with 40% indicating that the delays were significant.
As reported by one supply manager, “The (freezing temperatures in the south) followed by panic buying and opportunistic price increases have further stressed supply chains. I believe this could be followed by a downturn.”
“In March and April of last year, the region lost 106,000 manufacturing jobs. However, since bottoming in April of last year, Mid-America has added 58,000 manufacturing jobs. Creighton’s monthly survey results indicate that the region is adding manufacturing business activity at a healthy pace, and that growth will remain strong well into the second 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 above growth neutral for April, but sank from 60.0 in March to 57.2 for April. “More than one of five, or 22%, of supply managers named finding and hiring qualified workers as the greatest 2021 challenge to their firm,” said Goss.
Other comments from April survey participants:
“Several suppliers are now on "allocation" from raw metal suppliers.”
“Aluminum and steel supplies and prices are of particular concern now and probably through July.”
“Tough year for procurement.”
“The supply chain madness continues.”
Wholesale Prices: The wholesale inflation gauge for the month surged to a record high 96.2, up from March’s 94.0.
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 wholesale prices. Since June of last year, metal prices have expanded by 20.8%, and lumber products have advanced by 63.1% 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....
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