Midwest economy: September's state-by-state glance

OMAHA, Neb. (AP) — 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. Creighton University economics professor Ernie Goss oversees the report.

The overall index ranges between 0 and 100. Growth neutral is 50. Any score above 50 suggests growth in a factor while a score below 50 suggests decline for that factor over the next three to six months.

Here are the state-by-state results of the September survey in the Mid-America region:

Arkansas: The state's overall index slipped to 49.6 from August's 51.2. Components of the index were new orders at 43.5, production or sales at 49.6, delivery lead time at 50.3, inventories at 50.5, and employment at 54. "Job growth in the state has slipped over the past several months. Our recent surveys indicate that the Arkansas' job growth will continue to decline for the final quarter of the year with no new net job gains," Goss said. "Job gains for durable goods producers will be offset by losses for nondurable goods manufacturers. The 2012 drought will continue to restrain retail sales in the state."

Iowa: The overall index declined to 56.5 from 57.1 in August, but it has remained above growth neutral for 33-straight months. Components of the index were new orders at 59.6, production or sales at 55.4, delivery lead time at 58.8, employment at 53.2, and inventories at 55.5. "Both durable and nondurable goods manufacturers continue to report expanding economic conditions with job gains. The 2012 drought has yet to put a dent in business activity for agriculture equipment manufacturers in the state, but has negatively influenced retail sales," Goss said.

Kansas: The state's overall index sank 47.3 from August's 48. Components of the index were new orders at 45.5, production or sales at 53.1, delivery lead time at 46.8, employment at 45.3, and inventories at 46. "Surveys over the last several months point to no job gains for Kansas for the final quarter of 2012. The 2012 drought will continue to weigh on businesses linked to agriculture in the state. Pullbacks in exports will negatively impact the state's economy in the fourth quarter of 2012," Goss said.

Minnesota: For a third straight month, the Minnesota index remained in negative territory. The index decreased to 47.2 from 49.7 in August. This is the first time since the recession that the overall index has been below 50 for three straight months. Components of the index were new orders at 36.8, production or sales at 42.9, delivery lead time at 60.4, inventories at 50.3, and employment at 45.8. "Very strong job growth for the first half of 2012 will be replaced by zero to slightly negative employment gains for the final quarter of 2012. Job gains for durable goods producers will be more than offset by job losses for nondurable goods manufacturers, including food processors," Goss said.

Missouri: The September index slipped to 51 from August's 53.9. Components of the index were new orders at 49.9, production or sales at 52, delivery lead time at 54.4, inventories at 45.4, and employment at 53.1. "Durable goods producers in Missouri continue to report very healthy growth. However, nondurable goods manufacturers are experiencing pullbacks in economic activity. Additionally, businesses linked to agriculture continue to be negatively influenced by the 2012 drought. Job additions for the final quarter of 2012 will be less than one-fourth of that experienced in the first quarter of 2012," Goss said.

Nebraska: After two months in negative territory, Nebraska's overall index improved to a weak 50.3 in September from August's 47.8. Components of the index were new orders at 46.3, production or sales at 49.9, delivery lead time at 55.8, inventories at 52, and employment at 47.7. "Job growth will be flat for the final quarter of 2012 for Nebraska. Gains for durable goods producers will be offset by losses for nondurable goods manufacturers, including food processors," Goss said.

North Dakota: North Dakota led the region in September with an overall index of 61.6, up from August's 57.4. Components of the overall index were new orders at 70.9, production or sales at 74.7, delivery lead time at 64.2, employment at 52.3, and inventories at 45.9. "All sectors of the North Dakota economy continue to expand at a solid pace. However, industries and firms with close ties to energy are growing at a very healthy pace with labor shortages reported in some areas of the state," Goss said.

Oklahoma: The overall index improved to 56.6 in September from August's 53.6. Components of the index were new orders at 54.8, production or sales at 49.5, delivery lead time at 78.1, inventories at 42, and employment at 58.4. "Durable goods producers in Oklahoma, such as metal product manufacturers, are expanding at a very healthy pace. This expansion is more than offsetting losses for nondurable goods manufacturers such as food processors. Surveys over the past several months point to solid gains and a reduction in the state's unemployment rate by 0.3 percentage points in by the end of the year," Goss said.

South Dakota: For a third straight month, South Dakota's index remained below growth neutral at 46.6, down from August's 47.2. Components of the index were new orders at 42.9, production or sales at 50.7, delivery lead time at 49.9, inventories at 45.4, and employment at 44.1. "Manufacturing growth has stymied over the past several months. Companies in South Dakota continue to expand sales and output via increases in the hours worked of current employees rather than adding new workers. Job growth will be flat for the final quarter of 2012," Goss said.


Online:

Creighton Economic Forecasting Group: http://www.outlook-economic.com

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