From Creighton University's Heider College of Business, October 1:
September survey highlights:
- Creighton’s regional Business Conditions Index climbed into a range indicating positive, but slowing growth for the next three to six months.
- Business confidence plummeted to its lowest level since the first month of COVID-19, March 2020.
- Almost 73.3%, of supply managers expect holiday and Christmas shoppers to face significantly higher prices and empty shelves this season.
- Approximately one in three supply managers said finding and hiring qualified workers will be the greatest challenge for the next 12 months, up from one in five last month.
- Supply bottlenecks slammed regional imports lower.
OMAHA, Neb. (Oct. 1, 2021) – Since declining to a record low in April of last year, the Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, has remained above growth neutral for 16 of the last 17 months.
Overall index: The Business Conditions Index, which uses the identical methodology as the national ISM, ranges between 0 and 100, declined to a still solid 61.6 from August’s 68.9. Supply managers reported that worker shortages represented the greatest challenge for the next 12 months and was restraining growth.
“Creighton’s monthly survey results indicate the region is adding manufacturing business activity at a positive pace, and that regional growth will remain solid, but somewhat slower. Supply chain bottlenecks and labor shortages remain the primary obstacles to growth,” said Ernie Goss, Ph.D., director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.
“Almost three of four, or 73.3%, of supply managers expect holiday and Christmas shoppers to face significantly higher prices and empty shelves this season. The message from supply managers is to order early,” said Goss.
As reported by one supply manager, “Critical supplies are now on allocation for the first time in decades.”
Employment: The regional employment index remained above growth neutral for September, but sank to 56.7 from August’s 64.6. “Even with strong manufacturing job growth, the region has yet to recover all job losses from the pandemic. The latest U.S. Bureau of Labor Statistics data indicate that current regional nonfarm employment is down by 472,000 jobs, or 3.4%, compared to pre-COVID-19 levels,” said Goss.
“Average hourly wages for all manufacturing workers in MidAmerica expanded by 2.6% over the last 12 months compared to a stronger 3.0% for the same period between 2019 and 2020,” said Goss.
Even with solid job growth for the month, firms continue to report difficulties in finding and hiring new workers. Approximately one in three supply managers said finding and hiring qualified workers will be the greatest challenge for the next 12 months. “This is up from one in five from the previous month that expected labor shortages to be a top challenge,” said Goss.
Other September comments from supply mangers were:
“Complex supply issues. USA should be able to muddle through the holidays. Markets and economy may contract significantly next year.”....
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