Omaha ? Fewer of the supply managers surveyed in July for the Mid-America Business Conditions Index were confident about the regional recovery, despite positive economic signs in nine Midwest and Plains states.

In the report released Monday, the July confidence index dropped to 54.8, its lowest level since February 2009. The index was 59.4 in June and 69.0 in May.

“Even as the economy improves, it is evident that supply managers are becoming less confident about the economy six months down the road,” said Creighton University economics professor Ernie Goss, who oversees the report.

The overall index also dropped, hitting 60.8 in July, compared with 62.5 in June and 64.2 in May.

The report surveys supply managers and uses a collection of indexes that range from zero to 100. Any score above 50 suggests economic growth in the next three to six months. States in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

“Surveys over the past several months indicate that the economic recovery, which has been under way since last fall, will continue but at a weaker rate,” Goss said in a news release accompanying the report.

“I am concerned about some of the elements of our July survey,” Goss said. “For example, while the new-orders index remained above growth neutral, it took its biggest one-month tumble in more than 10 years.”

Among the good economic signs was the regional employment index. For a seventh straight month, it remained above growth neutral, hitting 58.8 compared with 58.3 in June.

In the July survey, supply managers were asked whether their companies would do any hiring over the next six months. Thirteen percent of respondents said they expected layoffs, but a third said they anticipated new hiring for the rest of the year.

Goss said those numbers compare favorably with November 2009 and January 2010, for example, when 41 percent and 24 percent, respectively, expected layoffs over the next six months.

The region added jobs at an annualized rate of 1.7 percent for the first half of 2010.

“While I do expect job growth in the second half of 2010, the rate will be down from the first half. Unemployment rates will remain unacceptably high,” Goss said.

The prices-paid index, which tracks the cost of raw materials and supplies, dropped in July but remained above growth neutral for a 14th straight month. It hit 64.1, compared with 68.6 in June and 80.4 in May.

“Even though our inflation gauge remains high, we are tracking declining inflationary pressures in the pipeline,” Goss said.

For the sixth month in a row, the supply managers surveyed raised their inventory levels. The July inventory index rose to 55.7 from 55.1 in June.

“The growth in inventories has been a positive and significant factor pushing the regional economy higher,” Goss said. “However, we need to see an increase in the pace of consumer buying before we can be assured that the recovery will continue at a solid pace. Inventory buildups are not the basis for sustained economic growth.”