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Economy Slowing in Nine Midwest, Plains States
OMAHA, Neb. (AP) — While the economy in the Midwest and Great Plains has been slowing down, a new economic report suggests the region will continue to see some growth.
The overall economic index for nine states in the region dipped to 57.2 in June from May's 57.6 and April's 60, but remained in positive territory. The index based on a survey of business leaders and supply managers covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. It ranges from zero to 100, and any score above 50 suggests growth. Creighton University economist Ernie Goss, who oversees the monthly survey, said businesses in the region are still benefiting from healthy farm income and exports, but the activity is slowing. And global economic problems are hurting export orders. "Europe's economic problems are spilling over into the region via weaker commodity prices generated by the advancing U.S. dollar," Goss said. "Recent gains in the dollar have made U.S. goods less competitively priced abroad." A quarter of those who responded to the survey say the biggest hurdle in the next year is the implementation of health care reform. But about 35 percent said the economic turmoil in Europe represents the largest economic challenge for their company. Hiring remains strong in the region as the employment index climbed to 61.8 from May's 61.2. Goss said the region continues to outperform the U.S. in terms of job growth. The prices-paid index dropped to 51.1 in June from May's 59.9 and April's 67.8. That suggests a break from inflation. "Slower economic growth, European economic turmoil, and a stronger dollar are all contributing to declining inflationary pressures," Goss said. "The degree to which inflationary pressures have cooled has surprised me." The confidence index increased in June to 56.7 from May's 55.8, suggesting that managers remain somewhat optimistic about the next six months. The June export index fell into negative territory at 48.4, which is the lowest reading since August 2009. That's down from May's 55.1. "Given the importance of exports to regional growth over the past year, this pullback in exports is a significant problem if this trend continues," Goss said. The import index also declined to 51.5 in June from May's 57.1. Other components of the overall index were: — The inventory index, which declined to 53.9 from May's 55.3. — New orders increased slightly in June to 57.3 from 57.2. — Production or sales fell to 56.7 in June from 61.9. — And delivery lead time increased to 56.2 from May's 52.7. |
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