Survey suggests slower Midwest, Plains recoveryOMAHA, Neb. — An October survey of supply managers in nine Midwestern and Plains states suggests that the regional economy will continue to grow, but at a slower pace.
OMAHA, Neb. — An October survey of supply managers in nine Midwestern and Plains states suggests that the regional economy will continue to grow, but at a slower pace.
The Mid-America Business Conditions Index dropped for the fourth time in the past five months, to 52.3 last month from 56.3 in September, according to a survey report released Monday.
The new figure was the lowest for the region since December.
“Even so, surveys are not pointing to a double-dip recession,” said Creighton University economist Ernie Goss, who oversees the survey.
But Goss repeated the note of caution he sounded following the September survey: Increasing federal income taxes on Jan. 1 would hinder economic growth in the U.S. and the region.
Congress has been debating extending income-tax cuts for families making less than $250,000 and individuals making less than $200,000. Other tax cuts also are being debated.
The survey and 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.
Looking ahead six months, the survey’s index on economic optimism jumped to 62.0 in October from 51.6 in September and 52.4 in August.
“This is the first increase in the confidence index since April of this year, and one that I did not anticipate,” Goss said. “Very healthy farm income and record-low interest rates combined to boost the economic outlook for firms in the region,” he said.
The regional employment slipped for the 10th straight month but remained above growth neutral: 50.6 in October, compared with 53.2 in September.
Goss said 19.4 percent of companies surveyed reported increases in employment while 19.2 percent reported drops.
Since May, the region has lost about 14,000 jobs.
“Our surveys over the past several months point to positive but very weak job growth in the months ahead,” Goss said.
Other components of the October overall index:
— wholesale prices at 69.9, down from 71.1 in September;
— inventories dropped to 48.3 from 56.3 in September;
— trade inched up to 51.9 from 50.0 in September;
— new orders at 50.0, down from September’s 56.0;
— production or sales at 52.8, down from 57.9 in September;
— delivery lead time at 59.7, up from 58.4 in September.