OMAHA, Neb. (AP) - A second straight monthly survey of nine Midwest and Plains states shows signs that the regional economy is slowing down, according to a report issued Thursday.
The overall Mid-American Business Conditions Index dropped to 47.7 last month, compared with 49.6 in August, the report said.
"The strong U.S. dollar and global economic weakness are having a negative impact on manufacturers and businesses linked to manufacturing in the region," said Creighton University economist Ernie Goss, who oversees the survey. He also said weak crop prices and energy prices have harmed the regional economy.
Economic optimism for the next six months, as reflected by September business confidence index, fell to 47.7 from 52.4 in July.
The survey 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. A score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The regional employment gauge plunged last month to 42.6 from 52.0 in August.
"Industries and areas dependent on agriculture and energy are experiencing cuts. For example, metal producers and agricultural equipment manufacturers continue to report job losses," Goss said.
The new export orders index also dropped, hitting 42.4 in September, compared with 50.0 in August. The import index for September increased to 48.9 from August's 47.9.
"The strong U.S. dollar, making U.S. goods less competitively priced abroad, and a weaker global economy hammered new export orders for the month," Goss said. "On the other hand, weaker regional growth and lower oil prices again pushed the import index below growth neutral for the month."
Here are the state-by-state results for September:
Arkansas: The state's overall index slipped to 50.8 from August's 52.1. Components of the index were new orders at 48.8, production or sales at 51.5, delivery lead time at 61.2, inventories at 47.1 and employment at 45.4. "Both durable- and nondurable-goods manufacturing are losing jobs as a result of productivity growth. Even so, I expect slight economic and job gains for the remainder of 2015," said Goss.
Iowa: Iowa's overall index dropped to 50.2 from 51.6 in August. Components of the index were new orders at 48.2, production or sales at 50.8, delivery lead time at 60.4, employment at 44.8 and inventories at 46.5. "Job losses for heavy manufacturers in the state were more than offset by gains for nondurable-goods producers, including food processors," Goss said. "Economic activity surrounding the upcoming Iowa caucuses has certainly been, and will continue to be, a boost to the state economy."
Kansas: The state's overall index slipped to 47.1 from 48.2 for August. Components of the index were new orders at 45.3, production or sales at 47.8, delivery lead time at 56.8, employment at 42.1 and inventories at 43.7. "Both durable- and nondurable-goods producers in the state continue to report downturns in economic activity, with transportation equipment manufacturing experiencing significant pullbacks," Goss said.
Minnesota: Minnesota's overall index climbed to a regional high of 53.0 from 51.9 in August. Components of the index were new orders at 54.8, production or sales at 49.8, delivery lead time at 59.7, inventories at 45.9 and employment at 54.9. "Durable-goods producers, including metal manufacturers and computer and electronic equipment producers, are experiencing upturns in economic activity," Goss said. "Surveys results over the past several months point to solid but not spectacular economic growth for the rest of 2015."
Missouri: The state's overall index slipped to 50.5 from 50.9 in August. Components of the index were new orders at 46.1, production or sales at 51.2, delivery lead time at 60.8, inventories at 46.8 and employment at 47.4. "Weakness in the state's nondurable-goods sector was offset by solid improvements for durable-goods manufacturers in the state," Goss said.
Nebraska: After remaining above growth neutral for 19 straight months, Nebraska's overall index has hit a mark below 50.0 for the third straight month. The index inched downward to 45.4 in September, compared with 45.9 in August. Components of the index were new orders at 43.6, production or sales at 46.0, delivery lead time at 54.7, inventories at 42.1 and employment at 40.6. "Both durable- and nondurable-goods producers in the state are experiencing downturns in economic activity," Goss said. "Economic activity for producers tied to agriculture has been especially weak. I expect this to begin negatively affecting the broader economy in the final quarter of this year and into 2016," he said.
North Dakota: The state's overall index rose to 41.7 in September from 41.3 in August, also the regional low. Components of the overall index were new orders at 40.1, production or sales at 42.3, delivery lead time at 50.3, employment at 37.3 and inventories at 38.7. "Low oil prices are now negatively influencing economic activity outside of energy," Goss said. "Durable- and nondurable-goods manufacturers are detailing slowdowns in economic activity. I expect the state's overall economy to lose another 5,000 jobs in the final quarter of this year," he said.
Oklahoma: Oklahoma's overall index dipped to a 46.2 after hitting just 48.1 in August. Components of the index were new orders at 45.5, production or sales at 48.0, delivery lead time at 51.2, inventories at 43.9 and employment at 42.4. Low oil prices are harming economic activity outside of energy, and durable- and nondurable-goods manufacturers are reporting slowdowns. "I expect the state's overall economy to lose another 4,000 jobs in the final quarter of this year," Goss said.
South Dakota: The state's overall index declined to 50.9 last month from 54.3 in August. Components of the index were new orders at 48.9, production or sales at 51.6, delivery lead time at 61.3, inventories at 43.9 and employment at 45.5. Manufacturers continue to expand at a positive pace, Goss said. "I expect the state to add more than 2,000 jobs in the final quarter of 2015," he said.
Link:
Creighton Economic Forecasting Group: http: //www.outlook-economic.com