June economic report echoes previous signs for Midwest

? Data from a June survey echo previous signs that slower economic growth likely lays ahead for nine Midwestern and Plains states, according to a report released Wednesday.

The report said the overall Mid-America Business Conditions Index rose to 53.0 last month from 50.4 in May.

“Much weaker business conditions for firms tied to energy are restraining the overall reading,” said Creighton University economist Ernie Goss, who oversees the survey. “Weaker conditions were particularly evident in Oklahoma and North Dakota, two energy-producing states. This weakness is spilling over into metal manufacturers throughout the region.”

The survey results from supply managers were compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests economic growth, while a score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Looking ahead six months, the business confidence index rose to 59.9 from May’s 58.3.

“Improvements at the national level in housing, retail sales and hiring pushed supply managers to raise their expectations about future economic conditions,” Goss said.

On the employment front, the regional employment gauge indicated slightly negative to stagnant job growth for manufacturing and value-added services firms in the region. The index hit 49.1, compared to 48.3 in May.

For the June survey, supply managers were asked about the hiring situation at their companies, a question that also was asked in June 2014. There was little change from last year, Goss said.

“Approximately four of 10 firms in both surveys expected to hire additional workers in the second half of the year,” Goss said. In this year’s survey, only 7.1 percent anticipated layoffs in the year ahead, which is down from the figure of 10.4 percent in June 2014.


Kansas

The overall index for June inched up to 50.1 from May’s 49.7. Components of the Kansas index were new orders at 51.4, production or sales at 51.6, delivery lead time at 49.8, employment at 47.9 and inventories at 51.4. “Both durable- and nondurable-goods manufacturers in the state are facing weak but slightly positive economic prospects,” Goss said. “Transportation equipment manufacturers and food processors are growing, but at a snail’s pace,” he said.

Missouri

The June overall index for Missouri dropped to 50.1 from 50.7 in May. Components of the index were new orders at 48.9, production or sales at 51.5, delivery lead time at 49.8, inventories at 51.4 and employment at 50.3. Durable-goods manufacturers, including vehicle producers and machinery manufacturers, reported stronger growth for June. “However, much of this growth was offset by weaker business conditions among nondurable-goods manufacturers, such as food processors in the state,” Goss said.

Nebraska

For the 19th straight month, Nebraska’s overall index remained above growth neutral. It hit 51.3 last month, up slightly from 51.1 in May. Components of the index were new orders at 52.7, production or sales at 52.8, delivery lead time at 51.0, inventories at 52.6 and employment at 49.1. “The state’s durable-goods producers, including agricultural equipment manufacturers, experienced pullbacks in economic activity for the month,” Goss said, but that pullback was offset by growth for nondurable-goods manufacturers.

Oklahoma

Oklahoma’s overall index remained below growth neutral for a second straight month, falling a tenth of a point, to 46.9 in June from 47.0 in May. Components of the index were new orders at 48.2, production or sales at 48.3, delivery lead time at 46.6, inventories at 48.1 and employment at 45.0. “The state is now experiencing the expected negative fallout from weaker economic conditions in the energy sector. Metal producers in the state linked to energy are also experiencing job losses and pullbacks in economic activity,” Goss said.