Key Midwest Economic Index Slipped In March Survey
OMAHA, Neb. (AP) — The economy in nine Midwest and Plains states remained strong in March because of the health of agricultural and manufacturing businesses in the region, but a new survey released Friday suggests business weakened slightly last month.
The overall Mid-America business conditions index declined to 61.4 in March from February’s 63.2, but the index remains in positive territory above 50.
“The export of agricultural and manufacturing goods continues to be an important source of growth in the region,” according to Creighton University Economics Professor Ernie Goss.
The survey of supply managers and executives and the report use a collection of indexes ranging from zero to 100. Organizers say any score above 50 suggests economic growth in the next three to six months, while a score below 50 suggests a contracting economy.
States in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The March employment index grew to 60.3 from February’s already-strong 58.3. Goss, who oversees the survey, says only about 11 percent of companies in the survey reported job cuts.
“Our surveys over the past several months indicate that the region will add another 100,000 by the end of 2011 leaving the region down 379,000 jobs, or 3.0 percent, since beginning of the recession,” Goss said.
Inflation continues to put pressure on businesses in the region. The prices-paid index registered 88 in March, down slightly from February’s 89.2.
“The upward pressures in prices will be further exacerbated by disruptions of supplies and products from Japan,” Goss said.
About 16 percent of supply managers predicted that the earthquake and tsunami in Japan would cause significant delays in supply orders. Roughly two-thirds of the business leaders who responded said they don’t expect the disaster in Japan to cause significant price increases.
Despite the inflation concerns, the business leaders remain confident in the economy. The March confidence index was 65.8. Goss said that’s lower than February’s 71, but still a strong reading.
The inventory index declined to 60.9 in March from February’s 61.9, but it showed that supply managers are continuing to stockpile supplies in anticipation of stronger sales.
The export index declined to 57.5 in March from February’s 62.4. The import index grew to 58.1 in March from 57.7 in February.
“Despite all of the international turmoil and uncertainty, businesses continue to expand both sales and purchases abroad,” Goss said.
Other components of the March overall index were:
– New orders at 65.7, unchanged from February.
– Production or sales index at 63, down from 65.6 the previous month.
– Delivery lead time at 57.2, down from February’s 64.7.
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