OMAHA, Neb. (AP) - Falling grain and fuel prices have hurt businesses tied to those industries, but have helped consumers open their pocketbooks, leading to an improved economic outlook for nine Midwestern and Plains states, according to a monthly report released Friday.
The survey of business leaders conducted by Creighton University put the region's overall economic index at 54.4 in December, a jump from November's 51.3.
"Over the past six months, a 26 percent decline in grain prices and a 13 percent plunge in fuel and related products have had negative impacts on businesses with ties to agriculture and energy," according to Creighton economist Ernie Goss, who oversees the survey. "At the same time, these price declines have produced positive impacts for firms more closely tied to the consumer."
Business leaders appeared somewhat less optimistic about their prospects over the next six months. The confidence index dropped to 58.1 from November's 61.5.
"Weaker economic conditions in the regional energy and agriculture sectors offset improvements in the national and regional job market in terms of supply managers' business outlook," Goss said.
The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. Results from supply managers are 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 employment index improved to 56.5 from November's anemic 49.4, pointing to possible job growth in the next three to six months, Goss said.
The prices-paid index, which tracks the cost of raw materials and supplies, was at its lowest level in five years, coming in at 50.8 from November's 56.4. Goss said the stronger dollar combined with weaker global demand has kept inflation pressures down.
The inventory index improved to 53.4 from November's 52.8 as supply managers added to their inventories of raw materials and supplies.
Other components of the December index:
- Export orders sank to 52.7 from 57 in November.
- Imports rose to 56.7 from 51.
- New orders jumped to 54.3 from 50.7.
- The sales index fell to 49.2 from 52.2.
- Delivery speed of raw materials soared to 58.9 from 51.4.
Link:
Creighton University economic reports at http://business.creighton.edu/economicoutlook