Midwest Economic Index Suggests Slow Growth
OMAHA, Neb. (AP) -- Slow economic growth is expected in nine Midwest and Plains states over the next three to six months, according to a monthly survey of business leaders released Friday.
The overall economic index for the region improved to 53.2 in January, after registering 49.5 in December and 48 in November. The survey of business leaders and supply managers uses a collection of indexes ranging from zero to 100. Any score above 50 suggests the economy will expand in the coming months, but the report's author said January's scores were a tepid mix.
"Much like the national economy, the regional economy's manufacturing sector moved sideways to slightly down with firms dependent on sales abroad reporting pullbacks in orders," Creighton University economics professor Ernie Goss said. "On the other hand, growth among durable-goods producers, especially manufacturers linked to automobile production, was a definite plus for January."
The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The January confidence index rose to 56.6 from 50.0 in December, and the inventory index climbed from 51.5 to 55.0, indicating businesses expanded their inventory. That's consistent with rising business confidence, Goss said.
"Improvements in the housing and automobile sectors, along with avoiding falling off the 'fiscal cliff' pushed the economic outlook higher," he said.
But slow job growth in manufacturing resulted in a fairly stagnant employment index, which inched up from 48.0 to 48.9 in January, he said.
"This lack of job growth translated into supply managers expecting only a 1.6 percent wage increase for 2013," he said.
Inflation increased in January, as indicated by the prices-paid index, which tracks the cost of raw materials and supplies. The prices-paid index jumped to 71.8 from December's 63.5 and November's 64.4.
Here's a look at the other components of the overall index:
— Exports slumped to 45.3 from December's 50.0.
— Imports improved to 50.7 from 48.7 in December.
— New orders increased to 52.3 from 46.4 in December.
— Production or sales improved to 53.9 from December's 48.0.
— And delivery lead time grew to 56.1 from 53.5 in December.
Creighton University economic reports: http://www.outlook-economic.com