Survey: As Trade Fears Mount, Economic Growth Slows in Midwest

Business remains strong in nine Midwest and Plains states, but a new monthly survey suggests growth is slowing as concerns about trade and tariffs increase.

The region’s overall economic index decreased to 61.8 in June from May’s 67.3, but any score above 50 indicates growth.

Creighton University economist Ernie Goss said the trade concerns and more interest rate increases are likely to slow the region’s economy.

“I expect expanding tariffs, trade restrictions and rising oil prices to slow growth and push inflation into a range leading to more aggressive Federal Reserve rate hikes,” Goss said.

The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests growth in that factor. A score below that suggests decline.

The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

The employment index dipped to 61.9 in June from May’s 66.3.

“Overall employment growth in the region over the past 12 months has been healthy but expanding at a rate below that of the nation,” Goss said.

But business leaders remain optimistic about their prospects over the next six months. The region’s confidence index declined to 59.8 in June from May’s 66.3.

The wholesale inflation index registered 86.9 in June, down slightly from May’s 88.9. That reflects the increase in products that steel and aluminum and increases in shipping costs.

The Institute for Supply Management, formerly the Purchasing Management Association, began formally surveying its membership in 1931 to gauge business conditions.

The Creighton Economic Forecasting Group uses the same methodology as the national survey to consult supply managers and business leaders.

The overall index ranges between 0 and 100. Growth neutral is 50, and a figure greater than 50 indicates growth in that factor over the next three to six months.

Here are the state-by-state results for June:

Arkansas: The overall June index for Arkansas fell to 62.5 from May’s 66.2. The components were new orders at 65.2, production or sales at 66, delivery lead time at 60, inventories at 59.2, and employment at 62.1. Over the past 12 months, the Arkansas economy has added 1,500 durable goods manufacturing jobs for a growth of 2.0 percent, and 2,600 nondurable manufacturing jobs for a growth of 3.2 percent.

Iowa: The June index for Iowa rose slightly to a very healthy 62.6 from 62.5 in May. Components were new orders at 63.3, production or sales at 69.9, delivery lead time at 64.4, employment at 59.3, and inventories at 56.2. Over the past 12 months, the Iowa economy has added 7,200 durable goods manufacturing jobs for a growth of 5.8 percent, and 2,400 nondurable manufacturing jobs for a growth of 2.6 percent.

Kansas: The overall Kansas index for June declined to 62.5 from May’s 68.7. Components were new orders at 65.6, production or sales at 64.3, delivery lead time at 60.4, employment at 62.5, and inventories at 59.7. Over the past 12 months, the Kansas economy has added 2,300 durable goods manufacturing jobs for a growth of 2.4 percent, and 2,400 nondurable manufacturing jobs for a growth of 3.6 percent, Goss said.

Minnesota: The overall Minnesota index decreased to a still solid 58.8 from May’s 64.2. Components were new orders at 61.2, production or sales at 61.4, delivery lead time at 55.9, inventories at 55.2, and employment at 60.1. Over the past 12 months, the Minnesota economy added 4,600 durable goods manufacturing jobs for a growth of 2.3 percent, and 1,300 nondurable manufacturing jobs for a growth of 1.1 percent.

Missouri: The June index for Missouri sank to 62.6 from 69.6 in May. Components were new orders at 64.9 production or sales at 65.6, delivery lead time at 59.7, inventories at 61.1, and employment at 61.8. Over the past 12 months, the Missouri economy added 2,000 durable goods manufacturing jobs for a growth of 1.3 percent, but lost 700 nondurable manufacturing jobs for a growth of minus 0.7 percent.

Nebraska: The June index for Nebraska fell to 66.1 from May’s regional high of 70.1. Components were new orders at 69.1, production or sales at 70.4, delivery lead time at 62.1, inventories at 63.2, and employment at 65.8. Over the past 12 months, the Nebraska economy added 1,800 durable goods manufacturing jobs for a growth of 4.1 percent, and 1,700 nondurable manufacturing jobs for a growth of 3.2 percent.

North Dakota: The North Dakota index climbed to 66.4 from May’s 62.4. Components were new orders at 68.9, production or sales at 70.3, delivery lead time at 63.9, employment at 65.7, and inventories at 63.1. Over the past 12 months, the North Dakota economy added 600 durable goods manufacturing jobs for a growth of 3.6 percent, but lost 300 nondurable manufacturing jobs for a growth of minus 3.6 percent.

Oklahoma: Oklahoma’s overall index has now remained above 50 for the last 11 months, but the index declined to 61.1 in June from May’s 68.5. Components were new orders at 63.8, production or sales at 64.4, delivery lead time at 58.6, inventories at 57.8, and employment at 60.8. Over the past 12 months, the Oklahoma economy added 5,000 durable goods manufacturing jobs for a growth of 5.7 percent but lost 1,500 nondurable manufacturing jobs for a growth of minus 3.3 percent.

South Dakota: The June South Dakota index fell to a still healthy 58 from May’s 66.8. Components were new orders at 60.8, production or sales at 61.0, delivery lead time at 55.4, inventories at 54.7, and employment at 57.9. Over the past 12 months, the South Dakota economy added 1,400 durable goods manufacturing jobs for a growth of 5.0 percent, and 500 nondurable manufacturing jobs for a growth of 3.3 percent.

Topics Trends Kansas Oklahoma Iowa Manufacturing Missouri Minnesota Arkansas