Survey: economy slows in 9 Midwest and Plains states
OMAHA, Neb. -- Economic growth appears to be slowing in nine Midwest and Plains states, but a monthly survey of business leaders released Friday suggests the region remains healthy overall.
The report's overall economic index declined to 57.6 in May from April's 60, but remained well above the neutral score of 50.
"The businesses that we survey continue to benefit from healthy farm income and exports," said Creighton University economist Ernie Goss, who oversees the survey. "As a result, our survey indicates growth for the next three to six months for the region. However, it is clear that this growth is softening as a result of the stronger dollar."
May's export index dropped to 55.1, from April's 57. The import index rose to 57.1, from April's 56.7.
Goss said exports are an important factor driving economic growth in the region, but the stronger dollar will slow new export orders in the months ahead. As the U.S. dollar strengthens, the region's exports become more expensive overseas.
The economic survey uses a collection of indexes ranging from zero to 100. Any score above 50 suggests expansion, while a score below 50 suggests contraction.
The survey of business leaders and supply managers covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
Hiring remains strong in the region even though the employment index dipped to 61.2 in May, from April's 62.1.
"I expect the region to continue to add jobs in the months ahead. However, the regional growth is likely to move lower as the global and U.S. economies weaken," Goss said.
The report's prices-paid index that tracks the cost of raw materials dropped to 59.9 in May, from April's 67.8.
"This is the lowest reading for our inflation gauge since the recession ended in June 2009. Slower economic growth and a stronger dollar are both slowing the growth in prices for inputs across the board," Goss said.
Business leaders appeared less certain about the economy over the next six months because the confidence index declined to 55.8 in May, from 64.5 in April.
Other components of the overall index were:
-- The inventory index declined to 55.3 in May, from 56.7 in April.
-- New orders fell to 57.2, from April's 64.
-- Production or sales increased slightly to 61.9 in May, from 61.3.
-- Delivery lead times declined to 52.7 in May, from April's 56.1.