OMAHA, Neb. — Economic growth is still slowing in nine Midwestern and Plains states amid trade and tariff disputes, according to a monthly survey report released Wednesday.
The Mid-America Business Conditions Index declined to 57.0 in July, from 61.8 in June and 67.3 in May, the report states. It's still the 20th straight month that the index remained above 50. Survey organizers say any score above 50 suggests growth.
"The regional economy continues to expand at a healthy pace, with manufacturing growth of approximately 2.6 percent over the past 12 months, compared to a lower 2.3 percent for the U.S.," said Creighton University economist Ernie Goss, who oversees the survey. "However, I expect expanding tariffs, trade restrictions and rising short-term interest rates from a more aggressive Federal Reserve to slow growth to a more modest but still positive pace."
The results from the survey of business supply managers are compiled into a collection of indexes ranging from zero to 100. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The slowdown is reflected in the July employment index, which dropped to 58.9 from June's 61.9.
"Overall employment growth in the region over the past 12 months has been healthy but expanding at a rate below that of the nation," Goss said. "On the other hand, manufacturing job growth has been stronger in the region than the rest of the U.S."
Almost two-thirds of the supply managers who responded said the tariffs and trade restrictions have harmed or will harm their companies. Nevertheless, the economic optimism index hit 63.9 last month, compared with 59.8 in June.
"Despite trade tensions and skirmishes, healthy profit growth, still low interest rates, and lower tax rates, supported robust business confidence," Goss said.
The Institute for Supply Management, formerly the Purchasing Management Association, began formally surveying its membership in 1931 to gauge business conditions.
The Creighton Economic Forecasting Group uses the same methodology as the national survey to consult supply managers and business leaders. Creighton University economics professor Ernie Goss oversees the report.
The overall index ranges between 0 and 100. Growth neutral is 50, and a figure greater than 50 indicates growth in that factor over the next three to six months.
Here are the results for Iowa and neighboring states for July as well as some export figures for 2017:
Iowa: Iowa's overall index sank to 55.9 in July from 62.6 in June. Index components were new orders at 53.6, production or sales at 58.8, delivery lead time at 58.4, employment at 57.1 and inventories at 51.6. U.S. Census data indicate that Iowa exported $4.5 billion in agriculture and food products last year.
Minnesota: Minnesota's overall index hit 55.8 in July, compared with 58.8 in June. Index components were new orders at 56.6, production or sales at 56.1, delivery lead time at 58.0, inventories at 51.3 and employment at 56.9. U.S. Census data indicate that Minnesota exported $2.3 billion in agriculture and food products in 2017.
Missouri: The state's overall index sank to 56.4 last month from 62.6 in June. Index components were new orders at 54.5, production or sales at 57.4, delivery lead time at 59.4, inventories at 52.5 and employment at 58.0. U.S. Census data indicate that Missouri exported $1.8 billion in agriculture and food products in 2017.
Nebraska: Nebraska's overall index fell to 61.0 in July from 66.1 in June. Index components were new orders at 58.6, production or sales at 62.3, delivery lead time at 64.5, inventories at 57.1 and employment at 62.5. U.S. Census data indicate that Nebraska exported $3.7 billion in agriculture and food products in 2017.