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Survey: Midwest, Plains Economy Improving

Based on a survey of business leaders in nine Midwestern and Plains states, economist predicts the region's economy will emerge from recession by the fourth quarter.

OMAHA, Neb. (AP) -- A survey of business leaders in nine Midwestern and Plains states suggests that despite some encouraging signs, the region is well short of economic recovery.

Economic indicators have pushed the overall index for the April Mid-America Business Conditions survey to 42.7, its highest level since September. The index hit 39.7 in March and 34.6 in February.

The survey's index ranges between 0 and 100, and any score below 50 on the index suggests a contracting economy over the next three to six months.

But economics professor Ernie Goss, who oversees the survey, said in a news release Thursday: "Our survey is not indicating an economic revival any time soon."

He predicted that the region's economy will emerge from recession by the fourth quarter, unless the growing threat posed by swine flu produces considerable economic problems.

The survey states are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Among key indicators in the survey were the April employment index, which rose to 41.4, well above March's 34.0 and January's record low of 29.0.

Goss said he expected the regional pace of job losses to slow in the months ahead.

"Even so, it will be 2010 before we begin to see job gains," he said.

The survey suggests that business leaders were optimistic about the economy when looking ahead six months. The confidence index reaches its highest level since January 2007, rising to 61.4 from March's 58.5.

"Very low interest rates, both short-term and long-term, and the federal stimulus package have clearly buoyed the economic outlook of supply managers in the Mid-America region. Even the impending Chrysler bankruptcy did not derail the economic optimism," Goss said.

The prices-paid index, which tracks the cost of raw materials and supplies, slumped to 34.2 from 41.1 in March.

Trade numbers improved slightly in April but remained weak. The export index hit 42.4, compared with March's 31.8. That was up from January's record low of 26.8.

The April import index dipped to 44.0 from March's 44.5.

Other components of April's overall index were:

-- new orders at 43.0, up from March's 40.7;

-- production at 42.8, up from March's 39.9;

-- inventories at 36.2, hitting a record low as it slid below March's 39.2;

-- and delivery lead time at 50.0, up from March's 44.3.

Goss and the Creighton Economic Forecasting Group have conducted the monthly survey since 1994.

The Institute for Supply Management, formerly the Purchasing Management Association, began to formally survey its membership in 1931 to gauge business conditions. The Creighton Economic Forecasting Group uses the same methodology as the national survey.

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