Midwest Economic Index Takes Big Jump In January
OMAHA, Neb. (AP) — The economy in nine Midwest and Plains states rebounded from a weak December and is poised to continue growing in the months ahead, according to a monthly survey of business leaders released Wednesday.
Creighton University economist Ernie Goss said December’s dip appears to have been related to seasonal patterns and one-time issues like the flooding in Thailand — not ongoing concerns about Europe’s debt problems.
The region’s overall index rose to 55.9 in January, compared with 50 in December. The survey uses a collection of indexes ranging from zero to 100 — any score above 50 suggests growth while a score below 50 suggests decline for that factor, Goss said.
The survey of business leaders and supply managers covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
“For much of the region, very healthy farm income has been an important driver of overall economic growth,” said Goss, who oversees the survey.
Businesses leaders who responded to the survey said they’re concerned about rising energy costs and the effects of any new regulations. Goss said those are some of the risk factors that could derail the economic expansion.
The region’s employment index rose above neutral for the first time since July, reaching 54.5 in January. That’s up from December’s 49.5.
“January’s reading is clearly good news on the employment front. However, I will have to see several months of similar readings to be assured that the labor market is back on a solid growth path,” Goss said. Employment in the region remains about 360,000 jobs behind pre-recession levels, he said.
The confidence index jumped to 67.2 in January from December’s 59.2, suggesting business leaders feel optimistic about the next six months. The prices-paid index, which tracks the cost of raw materials and supplies, increased to 67.8 in January from December’s 62.4. Goss said price pressures are increasing as the economy improves.
The inventory index rose in January to 55.3 from December’s 46.7. The increase suggests production will increase in the months ahead, Goss said.
The export index grew from 56.3 in December to 60.4 in January, and the import index jumped from 48 to 56.7.
Other components of the January index were:
— New orders increasing to 58.1, from December’s 52.3.
— Production or sales growing to 56.9 in January from 48.4 in December.
— And delivery lead time decreased to 54.7 from December’s 56.5.
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